The global oil price collapse is battering China's upstream oil companies but acts as a boon to downstream refineries, analysts said.

Partly due to the coronavirus pandemic, international crude prices slumped in the past few months, with the benchmark Brent crude nosediving from about $68 per barrel in early January to around $25 at present.

The upstream of the oil industry including oil producers and oilfield service firms has been hit hard by the price drop, said Dong Xiucheng, professor with the University of International Business and Economics.

The cost of domestic oil production is higher than importing from abroad. The more oil domestic firms produce, the more losses they may incur, Dong said.

Committed to becoming more energy self-reliant, China is unlikely to slow domestic oil production despite economic losses.

Peng Huagang, an official with the State-owned Assets Supervision and Administration Commission of the State Council, said that the plunging oil prices have partly led to steep profit declines in the domestic oil industry in the first quarter.

However, analysts said refiners may benefit from the price dive as they sit in the downstream of the industry chain and lower crude prices bring their production costs down.

With higher profit prospects, an increasing number of small and medium-sized refineries have resumed work. Some refineries in Shandong Province, east China, have processed oil that was purchased earlier at $20 per barrel.

Amid the steep global price cuts, state-owned oil companies have to slash costs to keep afloat.

Noting that the company is facing unprecedented pressure, Dai Houliang, Chairman of China National Petroleum Corp., said the convergence of two black-swan events—the novel coronavirus epidemic and global oil price slumps—has hit both the supply and demand of the oil and natural gas markets, pushing the company to trim spending this year.

China's two other major state-owned oil companies—Sinopec Group and China National Offshore Oil Corporation—are also believed to be considering cuts in investment.

As one of the world's biggest energy consumers, China has been building up stockpiles of crude oil, with imports rising 5 percent to 130 million tons during the first quarter.

However, China's oil storage facilities in some areas have been filled to near capacity, as the coronavirus epidemic disrupted business activities and kept more citizens indoors.

There are nearly 6,000 oil and gas companies in the free trade zone of Zhejiang Province, east China, boasting 31 million cubic meters of storage capacity.

Currently, no more space is left for refined oil products, and most crude storage facilities have been booked, according to the state broadcaster CCTV.

Average rental prices of storage tanks have risen about 10 percent since the Lunar New Year, it reported.

China's domestic oil output rose 2.4 percent year on year to 48.57 million tons from January to March, while sales of refined oil products went down more than 20 percent from a year earlier, official data showed.

Copyedited by Madhusudan Chaubey

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