In the intricate dance of global energy markets, China has emerged as a pivotal player, effectively establishing both a floor and a ceiling for crude oil prices through its strategic imports and stockpiling activities. As the world’s largest oil importer, China’s decisions ripple across international markets, absorbing surpluses when prices dip and scaling back when they climb too high.
This stabilizing influence is particularly evident in 2025, where robust stockpiling has helped moderate volatility amid geopolitical tensions and shifting OPEC+ production. Meanwhile, India, the second-largest net importer, plays a supportive role in price stabilization, though its impact remains secondary to China’s dominant position. By examining recent data on purchases, sources, storage versus demand, and market dynamics, we can see how these Asian giants are shaping the oil landscape.
China’s Dominant Role in Price Moderation
China’s oil strategy in 2025 has been characterized by aggressive stockpiling, creating a substantial buffer that cushions global prices. In October alone, the country recorded a crude oil surplus of approximately 690,000 barrels per day (bpd), up from 570,000 bpd in September.
This surplus—calculated as the difference between combined imports and domestic production (15.63 million bpd) and refinery processing (14.94 million bpd)—largely flowed into storage, exceeding immediate demand needs. For the first 10 months of the year, the average surplus stood at around 900,000 bpd, with imports and output totaling 15.65 million bpd against processing of 14.75 million bpd.
Imports have been a key driver, averaging 11.39 million bpd in October, bolstered by domestic output of 4.24 million bpd.
Over the first nine months, imports rose 2.6% year-over-year to about 11.65 million bpd, despite sluggish fuel demand.
Major sources include Russia, Saudi Arabia, Iraq, and the United Arab Emirates, which together supply the bulk of China’s needs, with Russia often leading due to discounted supplies amid sanctions.
Estimates suggest China added nearly 160 million barrels to storage in the first nine months, valued at over $10 billion, at a rate of about 530,000 bpd throughout the year.
This stockpiling far outpaces domestic demand growth. China’s oil consumption is projected to peak around 15.4 million bpd in 2025, but actual refinery throughput has lagged, rising only 6.4% year-over-year in October while dropping from September’s two-year high.
The surplus indicates that a significant portion—potentially most—of the excess is directed to strategic reserves rather than immediate use. State companies like Sinopec and CNOOC are expanding storage capacity by at least 169 million barrels across 11 sites in 2025 and 2026, underscoring a long-term commitment to building reserves.
How does this stabilize prices? China’s actions create a de facto price band. When prices moderate—such as Brent crude hovering in the $60-$70 range since August, down from a January high of $82.63—China ramps up imports and storage, absorbing global surpluses and preventing further declines.
This sets a “floor” by supporting demand. Conversely, when prices spike, as during the Israel-Iran conflict in September, stockpiling slows (dropping to 570,000 bpd), reducing upward pressure and establishing a “ceiling.”
Analysts note that this strategy has offset downward pressure from rising global inventories, keeping Brent stable even as OPEC+ increases output.
By stockpiling through most of 2025, China not only secures its energy needs—relying on imports for 70% of supplies—but also provides a sanctions safety net for the market, smoothing volatility.
India’s Supportive Influence as a Stabilizer
While China wields controlling influence, India acts as a key stabilizer, bolstering global demand without the same level of market dominance. India’s crude imports hit record highs in 2025, averaging close to 5 million bpd and occasionally surpassing that mark, up from previous years.
In September, imports rose 1.7% month-over-month to 19.93 million tons (about 4.7 million bpd), a 6.1% increase year-over-year.
October imports remained steady at around 1.6 million bpd, though overall figures for the year reflect strong growth driven by rising energy needs.
Primary sources mirror geopolitical shifts: Russia remains the top supplier, accounting for a significant share despite a 10% dip in some months, followed by Iraq, Saudi Arabia, UAE, and the USA.
These five countries provide about 86% of imports, up from 65% in FY20, with Russia’s portion surging due to discounted crude.
Imports are projected to climb to 5.8 million bpd by 2030, highlighting India’s growing footprint.
Compared to demand, India’s import dependency has edged higher to 88.4% in the first half of FY26, from 87.9% previously, as domestic production stagnates (declining 2.18% from April 2022 to March 2025).
With overall dependency at 89%, imports directly track booming demand from vehicle sales and industrial growth, leaving little surplus for large-scale stockpiling.
Unlike China, India does not aggressively build strategic reserves beyond operational needs, focusing instead on meeting immediate consumption.
India’s role in stabilization is thus more passive: By consistently absorbing discounted supplies—particularly from Russia—it helps cushion economies and quietly supports global price equilibrium without driving the agenda.
Policies to reduce import reliance, such as boosting domestic output or adjusting duties, have limited impact on volatility, given price elasticities and external factors.
India’s demand growth accounts for about 25% of global increases, aiding balance but not to the extent of China’s stockpiling-driven influence.
Global Implications and Outlook
Together, China and India represent a formidable duo in the oil market, with their combined imports exceeding 16 million bpd in 2025.
China’s proactive stockpiling absorbs excesses, limiting downside risks, while India’s steady demand provides consistent support. This dynamic has kept prices in check, even as non-OPEC production rises and geopolitical uncertainties loom.
However, as China continues building reserves into 2026 and India expands refining capacity, shifts in their strategies could introduce new variables—potentially amplifying or dampening volatility depending on global supply trends.
In essence, China’s ability to set price boundaries through calculated imports and storage underscores its market power, with India reinforcing stability from the sidelines. For energy stakeholders, watching these trends will be crucial as the world navigates toward a more balanced oil future.
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