China’s Refining Industry Sees 2.1% Growth in Early 2025 Amid Rising Fuel Demand and Geopolitical Shifts

By Shubhendra Anand , 17 June, 2025

China's refining sector showed resilience and adaptability in the first months of 2025, raising crude oil throughput by 2.1 percent over the year before. According to the National Bureau of Statistics, this increase resulted in a processing volume of almost 14.74 million barrels daily (bpd) over January and February.

One can attribute the increase in refinery output to several elements. Traditionally the season of more travel, the Lunar New Year celebrations resulted in higher gasoline and jet fuel consumption, increasing demand for refined goods. Furthermore, its first 200,000-bpd crude processing unit, which has been running at roughly 90 percent capacity since November, is the Shandong Yulong Petrochemical refinery, which started running in late 2024. This month, the refinery is expected to open its second 200,000-bpd crude facility, enhancing China's refining capacity for 2025.

Still, this expansion was not consistent throughout the refining industries. Rising crude oil prices due to strict United States sanctions on Russian and Iranian oil exports presented difficulties for independent refiners, sometimes called "teapots. These penalties upset established supply networks, thus motivating teapots to cut output during the first two months of 2025. On the other hand, state-owned companies such as Sinopec raised their throughput to offset the lower production from independent refiners, guaranteeing a consistent supply of refined goods for the home market.

The dynamics of crude oil imports also shaped the refining scene. For independent refiners cargoes arriving by the end of 2024 and early 2025, China issued a further crude oil import quota of at least 5.84 million metric tons in late 2024. This action intends to boost crude imports in expectation of rising demand. But China saw a rare draw on its crude oil supplies in the first two months of 2025 as refinery throughput topped the total availability from domestic production and imports. This was the first draw of this kind in 18 months, underscoring the careful equilibrium in the national oil industry between supply and demand.

Looking forward, China's refining policies still reflect the volatility of the world oil market. For example, primarily due to maintenance activities at Chinese refineries, Saudi Arabia's crude oil shipments to China are expected to drop in April to their lowest level in over a year. Sinopec's maintenance is A primary contributor to this decline, which influences 700,000 bpd of crude processing capacity spread over several refineries. Notwithstanding these difficulties, China's refining sector is dedicated to adjusting to changing global conditions, guaranteeing energy security, and satisfying home demand in 2025.

China's refining sector has shown remarkable resilience in the early months of 2025 in the face of geopolitical and economic constraints. The sector's vital contribution to supporting the country's energy infrastructure and financial stability is shown by its capacity to negotiate brutal international sanctions, modify import policies, and maximize manufacturing capacity.

China’s Refining Industry Sees 2.1% Growth in Early 2025 Amid Rising Fuel Demand and Geopolitical Shifts