China's independent oil refiners, known as teapots, have seen a slight increase in run rates recently, but still face challenges due to weak domestic fuel demand and supply risks from U.S. sanctions and tariffs. Teapots, which account for a quarter of China's processing capacity, have been impacted by the hardening U.S. stance on exports from Russia, Iran, and Venezuela. Weakening domestic demand and Beijing's new fuel oil tariffs and reduced tax rebates have also led to lower operations and maintenance. While there has been some improvement in supply and capacity utilization rates, teapots still operate at lower levels compared to state-owned refiners. The recovery in run rates is expected to continue in April and May, but will remain below year-earlier levels. The growing adoption of electric vehicles and the use of liquefied natural gas as a truck fuel also pose challenges for teapots. Additionally, new U.S. tariffs and the possibility of a global trade war further limit China's fuel demand.