China Stalls Refining Expansion as Hormuz Disruptions Mount

The Huajin Aramco Petrochemical Co. refinery in northeastern China, a project central to Saudi Aramco’s regional strategy, has seen its startup pushed from the second to the third quarter. The facility, designed to process 300,000 barrels per day, relies on a long-term supply agreement with the Saudi giant for 210,000 barrels of feedstock daily. Simultaneously, PetroChina has indefinitely shelved the restart of a 200,000-bpd unit at its Dalian refinery, effectively removing another critical piece of capacity from the near-term outlook.

These delays reflect a broader cooling of the Chinese market as crude import volumes plummet. Kpler data indicates a 44% drop in imports since February, falling to 6.36 million barrels per day in May. Refiners have managed to maintain throughput near 13.5 million bpd only by exhausting massive stockpiles accumulated throughout the previous year. With roughly 1 billion barrels of strategic and commercial inventory serving as a buffer, the industry is now betting that these reserves can weather the supply crunch, even as new infrastructure projects remain stalled by the volatile geopolitical climate.