China Cuts Fuel Price Hikes Amid Iran War Oil Surge

email: online@newsofbahrain.com 

Beijing: China has scaled back planned increases in fuel prices in an effort to ease pressure on motorists, as global energy costs climb amid tensions linked to the Iran conflict.

Petrol prices in the country have already risen by around 20% since the crisis began, following disruptions to oil shipments through the Strait of Hormuz—one of the world’s busiest maritime routes.

Authorities had initially announced steep increases of 2,205 yuan per tonne for gasoline and 2,120 yuan for diesel. However, after government intervention, the hikes have been reduced to 1,160 yuan and 1,115 yuan respectively, taking effect from Tuesday.

The move comes as more than 300 million drivers across China rely on petrol and diesel, with Gulf nations serving as a major source of crude imports. Over the weekend, panic buying led to long queues at fuel stations in several cities, with some outlets temporarily running dry.

Despite the adjustment, the latest increase remains the fifth—and largest—fuel price hike in China this year.

Global oil markets have been volatile, with Brent crude briefly rising above $100 per barrel on Tuesday, a day after sharp declines triggered by mixed signals over possible US-Iran negotiations.

China has, in recent years, built up one of the world’s largest oil reserves by taking advantage of lower prices and steady supply from Gulf producers. Data shows imports in the first two months of the year rose 16% compared to the same period last year.

Iran, despite US sanctions, continues to be a key supplier of discounted crude, with estimates suggesting China purchases over 80% of Iran’s oil exports.

Analysts estimate China’s crude reserves stand at around 900 million barrels—nearly three months’ worth of imports—while petrol reserves are believed to total about 1.4 billion barrels.

Even so, Beijing appears to be acting cautiously in the short term. Reports indicate that authorities have asked refineries to temporarily halt fuel exports to prioritise domestic supply, though officials have not confirmed the move.

Saudi Arabia and Iran each account for over 10% of China’s oil imports, according to US data.

In a statement, China’s state planner said the measures were aimed at offsetting “abnormal fluctuations” in global oil prices, easing pressure on consumers, and maintaining economic stability.

Fuel prices in China are reviewed every 10 days by the National Development and Reform Commission, which adjusts rates in line with global crude trends.