Sinopec Cuts Refining Runs, Seeks Access to State Oil Reserves

SEATTLE (Oil Monster): Sinopec, the world’s largest refiner, plans to reduce its refining runs by 5% this month as supply disruptions tighten crude availability. The company is also seeking government approval to tap China’s state oil reserves to stabilize operations.

Company President Zhao Dong confirmed that the refiner is facing challenges linked to geopolitical tensions and logistical constraints. The near-closure of the Strait of Hormuz has heightened risks, particularly as Sinopec sources nearly half of its crude from the Middle East.

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Despite a recent U.S. sanctions waiver allowing limited access to Iranian oil already in transit, Sinopec has ruled out purchases. Zhao cited concerns over payment mechanisms due to ongoing financial sanctions, as well as risks associated with aging vessels in the so-called shadow fleet.

To offset supply pressures, Sinopec is increasing procurement from alternative sources, including Saudi crude shipments from Yanbu and other regions outside the Middle East. However, earlier reports indicated that Beijing had rejected a request to access 13 million tons of strategic reserves.

The company continues to assess market conditions while prioritizing supply security and operational stability.