Commerzbank’s Barbara Lambrecht and colleagues note Brent has jumped as Iran–US tensions escalate and US policy debates gasoline tax relief. China’s crude Oil imports fell sharply in April, with further declines expected as shipments from Saudi Arabia and Iran drop. Beijing is drawing on reserves, maintaining refinery quotas, and curbing product exports to stabilise domestic supply, leaving a mixed picture across Oil and other energy imports.

Iran conflict and Chinese flows

"The price of Brent crude responded to the developments with a USD 7 increase since yesterday to USD 107 per barrel for now. The fact that the US government is considering suspending the gasoline tax shows that it, too, does not necessarily seem to believe in a quick agreement."

"The decline is likely only the beginning, as further drops in shipments from Saudi Arabia are on the horizon. According to traders, shipments in May halved compared to April, dropping to 20 million tons, and a further decline to 13 to 14 million tons is expected for June."

"Although crude oil processing figures for April are not yet available, all signs point to China having drawn on its crude oil reserves — built up over many years — for the first time in a long while. The National Development and Reform Commission has instructed refineries to maintain their 2025 production quotas regardless of costs."

"To ensure the supply situation, the Chinese government additionally imposed an export ban on diesel and gasoline. As a result, exports of oil products fell significantly in April by one-third compared to the previous month to 3.12 million tons, the lowest monthly level in more than nine years."

"According to the data provider Oilchem, China’s commercial diesel stocks are at their highest level since the summer of 2024."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)