China Diversifies Oil Supplies Amid Middle East Conflict Risks

Chinese refiners are buying more Russian and Iranian oil as conflict in the Middle East threatens supply disruptions.

Renewed attacks linked to the Iran conflict have disrupted shipping through the Strait of Hormuz, while Yemen's Houthi movement threatened to target Saudi oil exports. This has heightened concerns over the reliability of Middle Eastern crude supplies.

Chinese refiners are increasing purchases of Russian crude, particularly ESPO Blend, which is relatively short in shipping distance and cheaper than Persian Gulf-originating cargoes.

However, Russia's ability to consistently increase shipments to Asian buyers is becoming less certain due to Ukrainian drone attacks on energy infrastructure.