China Tries to Hold Off on Oil Reserves 'for as Long as It Can'

China may soon be leaning on a different kind of oil lifeline. Energy consultancy FGE says Beijing is nearing the point where it will let refineries tap into the country's large commercial crude reserves as Middle East tensions disrupt flows, especially through the Strait of Hormuz, reports Bloomberg. The most realistic scenario, per the firm: a drawdown of up to 1 million barrels a day over the next four to six weeks, mainly to help southern plants avoid sharp cutbacks or shutdowns. Analysts tell the BBC that China goes through about 15 million to 16 million barrels a day, making it the second-largest oil consumer in the world, behind only the US.

China has spent more than a year amassing an estimated 1.4 billion barrels of oil in total reserves, but analysts expect the government to shield its strategic stocks and, even for commercial ones, require multiple layers of approval. Above-ground commercial inventories were pegged at about 851 million barrels earlier this month. So far, Beijing has ordered big state refiners to curb fuel exports and cut runs—by as much as 1.5 million barrels a day, according to FGE—while prioritizing gasoline and diesel for domestic use. One analyst predicts China will delay dipping into reserves "for as long as it can." Deutsche Welle, meanwhile, details which nations boast the largest strategic oil reserves.