Ask AI · How can China’s energy policy proactively respond to oil price fluctuations?

Due to the escalating conflict between the U.S. and Israel, international crude oil prices have surged significantly, particularly in the Middle East where prices have reached historic highs. To mitigate the impact of the abnormal rise in international oil prices, reduce the burden on downstream users, and ensure stable economic operations and social livelihood, the National Development and Reform Commission (NDRC) of China has implemented temporary regulatory measures on domestic refined oil prices starting from March 23 at 24:00. It is reported that this is the first adjustment since the current mechanism was implemented in 2013. Liu Zhiqin, a senior researcher at Renmin University of China’s Chongyang Institute for Financial Studies, stated in an interview with the Satellite News Agency that China’s ability to respond calmly to external shocks is attributed to its forward-looking layout in the energy sector and the steady advancement of refined oil price mechanism reform over the years.

On March 23, the NDRC’s official website announced that according to the current pricing mechanism, the domestic gasoline and diesel prices (standard products) should be adjusted upwards by 2205 yuan and 2120 yuan per ton, respectively. After regulation, the actual adjustments are 1160 yuan and 1115 yuan, which is approximately a reduction of 0.85 yuan per liter on average nationwide for gasoline and diesel.

Liu Zhiqin commented that this is due to the steady advancement of China’s refined oil price mechanism reform in the past. Experts say that China’s reform and opening-up process has always relied on stable energy prices and an orderly energy market. The effective operation of China’s refined oil price adjustment mechanism has resulted in relatively minor impacts on China, one of the world’s largest energy importers, especially as a major oil-importing country, during this Middle Eastern crisis.

He assessed, “From the implementation situation, this mechanism has played a very positive role, mainly reflected in two aspects: first, it effectively resisted the shocks and instability caused by international oil prices and market fluctuations; second, it stabilized the domestic market, especially balancing the demands of domestic consumers and producers for different oil products, providing strong support for the smooth advancement of China’s reform and opening-up.”

In addition, China is believed to have the largest emergency reserves in the world. Shipping analysis company Vortexa estimates China’s total reserves at around 1.3 billion barrels, sufficient to sustain China’s economy for three to four months. According to publicly available data from the General Administration of Customs of China, the crude oil import volumes for November and December 2025 and January-February 2026 are expected to reach 5.089 million, 5.597 million, and 11.883 million tons, respectively, representing year-on-year increases of 14.95%, 17.0%, and 16.0%. The total crude oil imported over four months is 22.6 million tons, approximately 3.114 million tons more than the same period last year, equivalent to about 18.3 days of national oil consumption. Based on the current domestic consumption scale, existing commercial reserves plus strategic petroleum reserves can meet over 90 days of national consumption needs. Even if there are short-term fluctuations in imports, domestic production and living needs can be fully ensured without impact.

While regulating, the NDRC also clearly stated that it will guide enterprises to organize and transport refined oil production to ensure market supply and strictly investigate illegal activities to maintain market order and protect consumer interests.

Liu Zhiqin pointed out that, at the same time, data shows that the total amount of oil imported by China through the Strait of Hormuz accounts for only 6% - 10% of the domestic market share. Compared to other countries, China’s reliance on oil transportation through this strait is quite limited. “It can be said that China’s policy is proactive, constructive, and sustainable,” he concluded.

Since the large-scale military actions initiated by the U.S. and Israel against Iran on February 28, the situation in the Strait of Hormuz has continued to escalate, severely impacting global energy supply and international trade. In this regard, Liu Zhiqin analyzed that this will not only directly affect oil supply and demand issues but also impact the entire industrial chain related to oil production, development, and exploration, fundamentally shaking the stable foundation of oil supply.

He told the Satellite News Agency: “The market thus generally exhibits pessimistic sentiment, which is understandable. The countries most affected include European nations, and Southeast Asian markets may also face pressures of oil shortages, supply stress, and insufficient reserves. Although a few countries’ oil reserves can sustain usage for 70 to 90 days, from a long-term perspective, there remains much uncertainty regarding the future of the oil market.”

Regarding the situation in the Middle East, Trump stated on March 23 that the U.S. and Iran had very positive and productive negotiations. He pointed out that he had instructed the Pentagon to postpone strikes on Iranian energy infrastructure by five days. Iranian Parliament Speaker Mohammad Bagher Qalibaf stated that no negotiations had taken place with the U.S., and the false information in the news was intended to manipulate the market.

In this regard, Liu Zhiqin believes that for the international market, ending the Middle Eastern war as soon as possible, restoring navigation through the Strait of Hormuz, and stabilizing the oil market early is a common expectation of the global financial and industrial sectors. However, from the current situation, the realization of this expectation still faces many uncertainties.

Therefore, he emphasized that countries in the Middle East should unite to jointly resist U.S. and Israeli hegemonic policies:

“We are currently very concerned about a possible extreme situation. We have noted that the U.S. and Israel have effectively formed a joint situation similar to a ‘United States-Israel Union’ in the Middle East, which is very dangerous and should be resolved quickly to address the instability factors affecting world peace and peace in the Middle East. At the same time, it is especially important to promote the United Nations to effectively fulfill its economic and peace responsibilities and quickly quell the fires of war in the Middle East, restoring stability, order, and sustainable development to the global oil and energy markets.”

Source: Russian Satellite News Agency (Beijing Branch)

Release Date: March 25, 2026