Completed in less than an hour, PetroChina's Dalian refinery took one cargo each of Qatar Marine and U.K. Forties crude at $65 a barrel, said several sources with direct knowledge of the matter. Hengli bought an Oman cargo at $65 a barrel and Abu Dhabi's Upper Zakum crude at $70.50 a barrel, they said.
The prices were lower than the spot market as Middle East crude benchmark Dubai was at $74.09 a barrel on Thursday.
Given the small size of the release, analysts expect China's oil release to have a muted impact on global oil markets although Brent crude futures had turned negative during the auction process.
Calls to the National Food and Strategic Reserve Administration to confirm the results went unanswered.
Both of the winning refiners are based in the northeastern port city of Dalian, where the auctioned oil is stored.
China did not award a cargo of nearly 3 million barrels of Murban crude - the biggest parcel in the auction - because there were no bids, the sources said.
Bidders held back because of the cargo size and type of crude, they said. Murban, a light sour crude grade from Abu Dhabi, is not suitable for the Dalian refiners as they typically process medium to heavy grades.
Most of the auctioned oil was delivered into the Dalian storage tanks between April and August last year, when oil prices were at multi-year lows as the rapid spread of COVID-19 battered fuel demand.
Reuters reported on Wednesday that state refiners Sinopec, PetroChina, and private chemical producers Hengli Petrochemical, Zhejiang Petrochemical Corp and Shandong-based refiner Hongrun registered for the auction.
The auction is the first of its kind since China built its first strategic reserve storage in east China in late 2006.
China operates at least 12 government sites with a combined storage capacity of close to 340 million barrels. The government also rents space from commercial operators.
"The SPR could release 33 to 82.5 million barrels of crude oil in this series of auctions, but it is unlikely to have a material impact on global crude markets considering China's 10 million barrels per day (mb/d) import and 14 mb/d consumption," said Alex Sun, a consultant at Wood Mackenzie.
(Reporting by Chen Aizhu and Florence Tan; Editing by Jacqueline Wong and Tom Hogue)
By Chen Aizhu and Florence Tan