A local outlet reported that China's energy import structure is wobbling as the Strait of Hormuz has been blocked again by Iran's blockade and the United States' "counter-blockade." As the sea route connected to the Gulf region was cut off and imports plunged, China moved to diversify supply lines to Southeast Asia and elsewhere and to expand domestic crude production as a structural response.
According to the International Energy Agency (IEA) on the 21st, as of early April, crude oil traffic through the Strait of Hormuz plunged to about 3.8 million barrels a day from 20 million barrels a day before the war. The strait accounts for about 20% of global trade in crude oil and liquefied natural gas (LNG), but with the passage blocked again, hundreds of tankers and vessels are currently stuck.
As a result, China, the world's largest energy importer and highly dependent on the Gulf region, also saw imports plunge. Citing General Administration of Customs data, Chinese business outlet Caixin reported that China's March LNG imports totaled 3.95 million tons, down 19.2% from a year earlier. Imports from Qatar in particular fell 42.8%. Australian supplies decreased 26.4%, while Russian supplies rose 43.8%, but that was not enough to offset the declines.
For crude oil, China imported a total of 122.6 million barrels from six Gulf countries (Saudi Arabia, Iraq, the United Arab Emirates, Oman, Kuwait, and Qatar) in the same period, a 25% decline from a year earlier. Notably, supplies from Saudi Arabia (−30.7%), Iraq (−46%), Kuwait (−52.3%), and Qatar (−64.5%) fell sharply.
Although imports dependent on the Gulf plunged, total imports were 362 million barrels, down only 2% from a year earlier. This is seen as the result of China securing alternative supply lines in Southeast Asia and elsewhere. According to the General Administration of Customs, March crude imports from Indonesia surged to 40.58 million barrels—more than 100 times a year earlier—making it a major supplier. Imports of Russian crude reached 74.52 million barrels, up 13.3%. Imports of Omani crude also rose 44% year over year, which is attributed to Oman's export terminal being located outside the Strait of Hormuz.
Earlier, at a press conference on the 17th, Wang Changlin, vice chairman of the National Development and Reform Commission, said China would continue to diversify import sources to strengthen energy security. At the same time, Wang signaled an intention to expand energy stockpiles. According to Reuters, China's crude reserves are estimated at a minimum of 1.2 billion barrels, the largest in the world.
The Chinese government's long-term policy is to expand domestic crude oil production to build a structure that can withstand geopolitical crises. According to Reuters, China's crude output reached a record high of 4.3 million barrels a day last year. The increase has continued this year as well, and in March, despite a year-over-year decline in crude imports, daily output hit a monthly record high of 4.44 million barrels.