China is close to tapping its vast commercial oil reserves as supply disruptions from the Iran conflict grow more acute, an industry consultant said.
Beijing has stockpiled an estimated 1.4 billion barrels of crude reserves, and could draw down about 1 million barrels each day to respond to the crisis, Bloomberg reported.
Beijing has taken other steps to weather the shock; it has banned refined fuel exports, and Saudi Arabia is diverting some China-bound oil cargoes through a Red Sea port, though analysts said the alternative route won’t offset the disruption from the Strait of Hormuz closure.
“China cannot shield its economy entirely,” The Economist wrote, as higher oil prices raise freight costs and imperil industrial growth.
