Chinese refiners have delayed two major refining projects with a combined capacity of 500,000 barrels per day (bpd) due to supply uncertainties stemming from disruptions in Middle Eastern oil flows through the Strait of Hormuz during the Iran conflict, Reuters reported.
The largest delay involves Huajin Aramco Petrochemical Co. (HAPCO), a joint venture between Saudi Aramco, Norinco Group, and Panjin Xincheng Industrial Group. The startup of its 300,000-bpd refinery in northeastern China has been postponed from May–June to September or early October because of concerns over crude supply availability.
In a separate development, PetroChina has indefinitely delayed plans to restart a 200,000-bpd crude unit at its Dalian refinery. The project had originally been expected to resume operations this year to take advantage of discounted Russian crude, but those discounts have largely disappeared as global supply disruptions intensified competition for Russian barrels.
The delays highlight growing pressure on Chinese refiners, which are facing higher crude costs, government fuel price controls, and weakening fuel demand driven by the rapid adoption of electric vehicles. As a result, China's refinery throughput fell to about 13.3 million bpd in April, the lowest level since August 2022.
While China is slowing refinery expansion plans, India remains a major source of new refining capacity, with Hindustan Petroleum Corporation Limited and Indian Oil Corporation expected to add more than 500,000 bpd of refining capacity this year.