Asian refiners drive Dubai crude near $100 amid Middle East supply squeeze

The energy security architecture that Beijing has built since 2018 around its three state oil giants — Sinopec China Petroleum & Chemical Corporation, PetroChina, and CNOOC — is facing its most demanding test yet. With crude prices surging past $100 a barrel and Asian refiners scrambling for supply, the costs and benefits of China's state-directed oil strategy are coming into sharp relief.

A Buying Frenzy Amid Tightening Supply

Indian and Chinese refiners have sharply accelerated spot purchases of Middle Eastern crude in early September, with Indian Oil Corp. and PetroChina among the most aggressive buyers. Dubai benchmark futures have climbed to nearly $100 a barrel — the highest since May 2026 — while Brent crude settled above $101 on September 9, its highest close since late May. Physical premiums for Oman and Abu Dhabi's Murban crude have surged in tandem, with Murban commanding a premium of more than $30 a barrel over Dubai for delivery to East Asia.energiesmedia+1

The supply squeeze traces directly to the U.S.-Israeli conflict with Iran that erupted in late February 2026 and Tehran's subsequent closure of the Strait of Hormuz. Late in August, tanker attacks in the strait further disrupted cargo flows, while Saudi crude exports have dropped to their lowest level in records dating to early 2017. South Korean and Japanese buyers are competing alongside Chinese and Indian refiners for the same constrained Persian Gulf barrels, adding further demand pressure.energypolicy.columbia+2

China's Strategic Buffer

China was better prepared than most for this disruption. The country held roughly 1.4 billion barrels in oil stockpiles when the crisis began, enough to cover approximately seven months of net imports. Beijing had accelerated purchases ahead of the conflict, with imports rising 16% year-over-year in January-February 2026, before slashing imports and banning refined product exports once hostilities began.brookings+1

But the domestic price cap Beijing imposed to shield consumers has constrained refiner margins. While international oil companies posted record profits in the second quarter, Chinese majors absorbed part of the price shock in the name of supply stability. Sinopec and PetroChina have continued spending beyond what profits alone would justify to shore up domestic output from costly onshore fields.energynews

Mixed but Better-Than-Expected Results

First-half 2026 results showed the three majors beating expectations despite margin pressures. PetroChina reported net profit of RMB 103.9 billion, up 22% year-on-year; CNOOC posted RMB 85.8 billion, up 23.4%; and Sinopec recorded RMB 25.6 billion, up 19.3%. All three announced interim dividends. Yet Sinopec's second-quarter earnings fell 50% sequentially as the refining price cap took its toll.moomoo+2

With Chinese buyers now sourcing crude as far afield as Brazil, Canada, Argentina, and even the UK's North Sea, the scramble underscores both the reach and the limits of Beijing's energy strategy — a framework designed for resilience rather than profitability, now being tested in real time.energiesmedia