4 days ago
China’s Oil Stockpiles Become a Shield Against Western Pressure
China used to worry that other countries could interrupt its oil deliveries.
To prepare, it spent years buying and storing large amounts of oil.
After the United States attacked Iran, China used some stored oil and imported much less crude.
This helped keep world oil prices from rising even more and protected China’s economy.
China also exported far less gasoline, diesel and jet fuel.
Its renewable electricity, electric cars and railways gave people alternatives to using as much gasoline.
The country can also use its large coal supplies to make some products normally made from oil.
However, China cannot keep imports low forever because its economy still depends heavily on foreign oil.
Using reserves and limiting exports protects China but also creates economic costs for refineries and industry.
Analysts estimate China holds between 1 billion and 1.4 billion barrels of oil reserves, or about 120 days of imports.
After the U.S. attacked Iran, China reduced oil imports by about 3.5 million barrels per day while refinery runs fell by 1.6 million barrels per day.
China’s stockpiling accelerated from 2024, aided by discounted Russian and Iranian crude transported through shadow fleets.
Beijing also sharply reduced fuel exports, helping conserve oil but damaging refinery margins and parts of the manufacturing economy.
Renewables, electric vehicles, railways and coal-to-chemical technology have reduced China’s vulnerability to oil-supply disruptions.
- Who
- China, with analysts and economists assessing its oil reserves and energy strategy.
- What
- China reduced oil imports and drew on stockpiles after the U.S. attacked Iran, using energy policy to strengthen economic and geopolitical resilience.
- Where
- China and the global oil market, including import routes through the Strait of Malacca and constrained flows through the Strait of Hormuz.
- When
- Stockpiling accelerated in 2024; the import reduction followed the U.S. attack on Iran, with reserve withdrawals reported from early May to mid-August.
- Why
- To protect China’s economy and reduce vulnerability to energy disruptions or possible efforts by the United States and its allies to block oil shipments.
Resilience View
Cost-and-Limits View
Effect of oil stockpiles
Resilience View
China’s large reserves, alternative transport options and reduced imports show that oil is less of an Achilles’ heel than many analysts previously believed.
Cost-and-Limits View
Analysts say China cannot maintain unusually low imports indefinitely and must eventually balance economic growth against preserving its reserves.
Reducing fuel exports
Resilience View
Limiting gasoline, diesel and jet-fuel exports conserves crude oil and helps protect domestic energy security.
Cost-and-Limits View
The export cuts hurt Chinese refineries, particularly high-margin businesses, and contributed to weakness in manufacturing and the broader export economy.
Geopolitical leverage
Resilience View
The ability to reduce imports for months could help China withstand attempts to block energy shipments during a conflict, including a possible Taiwan-related clash.
Cost-and-Limits View
China still imported about 70% of its crude before the war, and disruptions around major maritime chokepoints could continue to impose substantial economic pressure.
Key facts
- Estimated reserves
- Analysts estimate China’s total oil reserves at 1 billion to 1.4 billion barrels, equivalent to about 120 days of imports.
- Import reduction
- China’s oil imports fell by about 3.5 million barrels per day in the second quarter of 2026 compared with the same period a year earlier.
- Reserve withdrawal
- China withdrew stockpiled oil at roughly 700,000 barrels per day between May and mid-August, according to Vortexa data cited in the article.
- Russian and Iranian crude
- From 2022 to 2025, China’s imports of Russian crude rose 26%, while imports of Iranian crude more than doubled.
- Fuel exports
- In the second quarter, Chinese gasoline exports fell 93% year over year; diesel exports fell by a quarter and jet-fuel exports by half.
- Oil dependence
- China relied on imports for about 70% of its crude oil supply before the war.
- Renewable electricity
- Renewables supplied around two-fifths of China’s electricity generation in the first half of the year, according to official data.
Quotes
Michal Meidan
Head of China energy research at the Oxford Institute for Energy Studies
“oil is not the Achilles’ heel we thought it was. I think a lot of people thought China was very, very vulnerable to oil supply disruptions. It’s not.”
livemint.com
Tom Reed
Head of oil market analysis at Argus Media
“Restricting exports is indeed a lever China can pull anytime, but it still entails economic costs.”
livemint.com
Sources
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