China directed major refiners to maintain high fuel output to shield domestic consumers from potential supply disruptions as strikes in the Persian Gulf threaten oil shipments amid the ongoing Iran conflict, according to people familiar with the matter.

The instruction underscores Beijing's priority on energy security as the Iran-Israel conflict threatens tanker traffic through the Strait of Hormuz, a chokepoint for roughly a fifth of global oil supply. Chinese refiners, which process about 17 million barrels daily, have already been running at elevated rates to meet post-pandemic demand.

Sustained high runs could support crude prices by keeping Chinese import demand robust, but may limit diesel and gasoline exports that have helped balance Asian product markets. If Gulf shipping risks escalate, Beijing may also tap strategic reserves or accelerate Russian pipeline imports.

The move reflects a broader pattern: when geopolitical risk spikes, China treats refinery throughput as a policy lever, not just a commercial decision. That dynamic gives OPEC+ less visibility on true demand signals and complicates price forecasting for traders.