China Rejects Sinopec Reserve Tap Request

China has rejected a request from its refining major Sinopec to access 13 million metric tons (95 million barrels) of national commercial oil reserves, according to two sources on March 12. This decision comes as Sinopec sought to mitigate an anticipated supply deficit stemming from the U.S.-Israeli conflict with Iran, which threatens Middle Eastern oil exports. Sinopec, the world's largest refiner by capacity, relies on the Middle East for approximately 60% of its 4 million barrels per day crude oil imports.

The requested volume represents about 19 days of Sinopec's crude processing or 40 days of its Middle Eastern imports. Beijing also informed refiners that China's strategic petroleum reserve, an emergency stockpile, remains off-limits for release. China's total strategic inventories are estimated at around 900 million barrels, equivalent to 78 days of imports. The National Food and Strategic Reserves Administration and Sinopec declined to comment on the matter.