Chinese authorities have asked state refiners in the country to consider halting diesel and gasoline exports next month due to heightened concerns about oil supply after Russia invaded Ukraine, Reuters reported on Wednesday, quoting sources familiar with the issue.
“This is to prevent a shortage as independent refiners are under big pressure to lower throughput in the face of soaring crude oil prices,” a source with knowledge of the talks with state refiners told Reuters.
China, the world’s largest crude oil importer, hasn’t condemned Russia’s invasion of Ukraine and is likely the country that will continue to trade with Russia regardless of any sanctions the Western allies decide to impose in the future.
However, China is concerned about its energy security, too, considering the skyrocketing prices of energy commodities, of which it is a major importer.
China plans to increase its crude oil, natural gas, and coal production, boost reserves of energy commodities, and keep stable imports to ensure its energy security amid skyrocketing commodities prices, the top Chinese economic planner said earlier this week.
“Since the beginning of this year, under the combined influence of multiple factors such as the Covid-19 pandemic, the monetary policy shift of major economies, and especially the escalation of geopolitical conflicts, the international commodity price situation has become more severe, complex and uncertain,” Lian Weiliang, a vice-director at the National Development and Reform Commission (NDRC), said at a press briefing as carried by South China Morning Post.
The upward price pressure on energy and agricultural commodities “poses a new challenge to ensure domestic supply and price stability,” Lian said.
The planning body NDRC said over the weekend that the country would raise coal production and reserves, develop “major petroleum reserve projects,” and increase petroleum reserves, too, per Reuters.
Last month, China said it would help run its coal-fired power plants at full capacity in a bid to ensure energy security, despite the climate goals of the world’s largest polluter.
By Tsvetana Paraskova for Oilprice.com
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