Beijing rejects Sinopec’s request to tap commercial reserve: sources

[BEIJING] China has rejected a request by refining major Sinopec to access 13 million tonnes (95 million barrels) of national commercial reserves to offset an expected supply gap as the US-Israeli war on Iran threatens Middle East exports, two sources said this week.

Sinopec, the world’s biggest refiner by capacity, relies on the Middle East for nearly 60 per cent of its total crude oil imports of roughly four million barrels per day, according to industry estimates.

The volume Sinopec sought equates to roughly 19 days of its crude processing, or 40 days of imports from the Middle East, including regular shipments from Saudi Arabia and Kuwait under annual supply agreements.

Beijing also told refiners that oil in China’s strategic petroleum reserve – the emergency stockpile it built before expanding its holdings to include commercial reserves – is off-limits for release for now, said the two people and several other sources.

China’s National Food and Strategic Reserves Administration declined to comment, citing confidentiality.

Sinopec declined comment.

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China has around 900 million barrels in strategic inventories, or 78 days’ worth of imports, according to estimates by Vortexa and traders. REUTERS