Gasoline consumption, refinery utilization rates, and crude oil imports: China's petroleum market amid the U.S.-Israel-Iran war

Document No.: A604/0653 Publication Date: June 10, 2026 Gasoline consumption, refinery utilization rates, and crude oil imports: China's petroleum market amid the U.S.-Israel-Iran war Gasoline consumption has plummeted; refinery processing volumes have fallen to the lowest level since 2022; crude oil imports have dropped to an eight-year low. China’s petroleum inventories have effectively cushioned the impact of the war and mitigated the upward pressure on international oil prices. Wang Nengquan As the world’s second-largest petroleum consumer and largest importer, how the over-100-day-long U.S.-Israel-Iran conflict—and oil prices surging past USD 100 per barrel—has affected China’s petroleum market is a topic of widespread concern among domestic and international industry institutions and the general public. Drawing upon official data released by China’s National Bureau of Statistics and General Administration of Customs, as well as analyses from domestic and international industry institutions and experts, this article examines China’s petroleum market conditions during wartime through three dimensions: gasoline consumption, refinery utilization rates, and petroleum imports. International industry institutions and experts contend that China’s massive petroleum stockpiles have not only effectively shielded the country against wartime shocks but also actively contributed to curbing further sharp increases in global oil prices. Gasoline consumption in 2026 may plunge by 5.5% In recent years, ongoing energy transition and rapid proliferation of new-energy vehicles have continuously reduced China’s refined oil consumption. The U.S.-Israel-Iran conflict-driven surge in global oil prices—breaching USD 100 per barrel—has significantly impacted China’s refined oil consumption in 2026. Industry expert Michael Kern wrote in an article published on the “Oil Price” website on May 14, 2026, that China’s gasoline consumption in 2026 may plummet by 5.5%. Since the Iran war disrupted global petroleum markets, China’s gasoline demand has already declined. This year’s decline is expected to exceed prior forecasts due to rising fuel prices and continued expansion of electric vehicle adoption. GL Consulting, a China-based firm, released its latest forecast to Bloomberg on Thursday, May 14, 2026, indicating that China’s gasoline demand this year could fall by up to 5.5% compared to 2025. Previously, the firm had projected a 5.2% decline for 2026. The anticipated 5.5% drop in China’s gasoline consumption represents the second-largest decline since the 2022 COVID-19 pandemic. Although government intervention has occurred in this sector, persistently higher gasoline prices continue discouraging consumers from driving conventional internal-combustion-engine vehicles—especially in many cities where electric vehicles have become more convenient and economical alternatives. The International Energy Agency (IEA), in its May 2026 “Oil Market Report,” stated that China’s petroleum demand growth is expected to slow to just 50,000 barrels per day (bpd) year-on-year in 2026, down from 220,000 bpd in the previous year, owing to a sharp demand contraction in Q2. The agency noted that weak petrochemical feedstock demand, coupled with a more adverse macroeconomic environment and rising fuel prices, has dampened fuel demand prospects, resulting in a year-on-year decline of 290,000 bpd in China’s petroleum consumption during Q2. Under the agency’s base-case scenario—which assumes gradual resumption of petroleum shipments through the Strait of Hormuz after June—China’s petroleum demand is projected to rebound in Q3.

Iran’s blockade of the Strait of Hormuz and China National Petroleum Corporation topping the A-share market capitalization rankings

Japan’s stock market also suffered heavy losses. The Nikkei 225 Index plunged 3.61%, closing at 54,245.54 points—the largest single-day drop since April 2025. The three major European stock indices also fell across the board: Germany’s Frankfurt DAX Index dropped 3.4%; France’s Paris CAC 40 Index fell 3.5%; and the UK’s FTSE 100 Index declined 2.8%. Industry insiders pointed out that the sharp declines in Japanese and South Korean stock markets stem from the severing of their “energy lifelines.” South Korea relies on the Middle East for 70% of its crude oil imports, with 99% of those shipments passing through the Strait of Hormuz. Japan depends on the Middle East for approximately 95% of its oil, of which 70% transits the Strait of Hormuz. By contrast, Europe’s energy sources are relatively diversified, and it holds some natural gas reserves. “Once the Strait closes, oil and gas prices instantly surge, causing production costs for all factories to explode. Most critically, markets fear tankers simply cannot get through—leaving factories vulnerable to supply disruptions and shutdowns. For Japan and South Korea, economies heavily reliant on imported energy, such a scenario would be catastrophic, potentially triggering runaway inflation and economic recession.” 3 CNPC Becomes the New A-Share Market Cap Champion While global equities plunged, A-share oil-and-gas stocks surged. On March 4, PetroChina opened sharply higher, experiencing significant intraday volatility. It closed up 0.68% at RMB 13.24 per share—the highest level since 2009—and its A-share market capitalization soared to RMB 2.14 trillion. Thus, PetroChina officially surpassed Agricultural Bank of China to become the new A-share market cap champion. PetroChina last held the top spot in October 2018—seven years ago. Other oil-and-gas stocks also rallied strongly: Zhunyou Shares posted three consecutive trading-day limit-ups; Shuifa Gas and Zhongji Oil & Gas hit daily trading limits; Tongyuan Petroleum rose over 13%; Taishan Petroleum, Zhongman Petroleum, and Sinopec Oilfield Services followed with gains. Some analysts argue that PetroChina’s current market cap leadership stems from three factors: short-term, the Middle East conflict pushed oil prices higher, directly fueling the rally; medium-term, the company’s robust resource base, ample proven reserves, and vertically integrated industrial chain provide strong cyclical resilience—alongside high dividend yields offering defensive appeal—and value re-rating under the “China Characteristic Valuation System” (“Zhongtegu”) framework. Data shows that, as of end-2024, PetroChina’s proven crude oil reserves stood at approximately 18.552 billion barrels—the highest among China’s “Big Three” oil companies—underscoring its substantial resource foundation. It operates a fully integrated upstream-downstream value chain spanning exploration & development, refining & marketing, and pipeline transportation—conferring strong resilience against cyclical fluctuations. Its full-cycle cost per barrel of oil has declined from USD 55 in 2020 to USD 37 in 2024, meaning it remains profitable even if oil prices fall to USD 50 per barrel. Natural gas has also emerged as its second growth engine. In the first three quarters of 2025, the operating profit of the company’s natural gas sales segment increased by 49.5% year-on-year. High dividend yield is another key attraction. Since its A-share listing, PetroChina has distributed over RMB 875 billion in dividends—a payout-to-funding ratio as high as 13:1. Amid declining interest rates and heightened market volatility, its dividend yield of 5%–6% holds considerable appeal for long-term and risk-averse investors.

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