China, the world’s largest importer of crude oil, has been on a buying spree in 2025, amassing stockpiles that are raising eyebrows across global energy markets. With crude prices hovering at levels reminiscent of two decades ago when adjusted for inflation, Beijing appears to be capitalizing on bargain-basement deals to bolster its strategic reserves. But is this just opportunistic shopping, or a deeper play in the face of geopolitical tensions and supply uncertainties? As traders in Singapore and analysts worldwide scramble to make sense of it, the numbers paint a picture of aggressive accumulation amid ample storage room for more.
The Motivations Behind the Stockpile Surge
China’s stockpiling isn’t new—it’s a hallmark of its energy security strategy, honed over years of navigating volatile global markets. This year, however, the pace has accelerated. According to estimates, China has purchased more than 150 million barrels of crude oil above its actual consumption levels, shelling out roughly $10 billion at current prices.
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In the second quarter alone, the country absorbed over 90% of the measurable global oil stockpiling, per data from the International Energy Agency (IEA).
Experts point to a mix of factors driving this behavior. First and foremost, oil is cheap. Brent crude futures for 2025 and 2026 are trading at historically low levels relative to inflation, making it an ideal time to load up for future needs.
As Javier Blas, energy columnist at Bloomberg, notes, “Nobody has a crystal ball about the duration of Chinese buying for its strategic storage,” but the low prices offer a straightforward incentive.
China’s history as shrewd commodity traders—think copper hoarding in past cycles—suggests they’re playing the long game, anticipating tighter markets from 2027 onward as non-OPEC supply growth slows.
Geopolitical undercurrents add another layer. With tensions in the Middle East and ongoing U.S.-China trade frictions, Beijing may be preparing for potential disruptions. A recent analysis highlights how China’s energy stockpiling could serve as a “strategic warning indicator,” building surge capabilities beyond normal peacetime needs.
Reports also indicate planning for Middle East crises, with reserves positioned to weather supply shocks.
Yet, Blas cautions skepticism: “Be skeptical of anyone claiming to know what the Chinese Communist Party plans.”
It’s a blend of economics and caution, with the exact intent shrouded in opacity.
Commercial incentives play a role too. State-owned enterprises (SOEs) like Sinopec and PetroChina are under directives to expand reserves, supported by government policies that encourage imports and storage builds.
This aligns with China’s broader energy reforms, spurring commercial crude stockpiling even as refinery runs hit records.
Storage Levels: Room to Grow Despite the Build-Up
China’s storage infrastructure is vast and expanding, providing the backbone for this stockpiling frenzy. Total crude storage capacity is estimated at over 1.8 billion barrels, a figure that’s grown about 30% in recent years through a combination of above-ground tanks, underground caverns, and commercial facilities.
As of March 2025, the Strategic Petroleum Reserve (SPR) stood at 531 million barrels, encompassing above-ground facilities (401 million barrels), commercial stocks (around 600 million barrels), and underground storage (about 200 million barrels).
Despite the aggressive buying, utilization remains moderate. Bloomberg reports that about half of China’s tanks and caverns are still empty, leaving significant headroom.
Onshore storage has risen by 73 million barrels since the start of 2025, with an additional 82 million barrels added in the second quarter alone.
For the first eight months of the year, crude imports averaged 11.36 million barrels per day (b/d), compared to refinery throughput of 14.73 million b/d—indicating a surplus funneled into storage.
New capacity is coming online rapidly. Between 2022 and 2023, China added about 100 million barrels of SOE storage, with further expansions underway.
A new phase of facilities is set to be ready for the remainder of 2025, potentially accommodating tens of millions more barrels.
Plans include adding another 60 million barrels to the SPR by March 2026, following a similar directive earlier in the year.
Underground options are also expanding; new caverns under construction could add at least 100 million barrels in combined capacity.
Looking ahead, Beijing aims to purchase up to 140 million barrels between July 2025 and March 2026, leveraging both strategic and commercial tanks.
While some reports suggest storage is nearing limits in certain segments—potentially leading to floating storage— the overall picture shows plenty of space for continued builds through 2026.
Who Is China Buying From? A Diversified Supplier Base
China’s import strategy emphasizes diversification, but a few key players dominate. In 2024 and into 2025, Russia has solidified its position as the top supplier, capitalizing on discounted Urals crude amid Western sanctions. For the first half of 2025, Russia supplied around 2.175 million b/d, followed by Saudi Arabia at 1.576 million b/d, Iraq at 1.279 million b/d, and the UAE at 712,000 b/d.
Other notable sources include Malaysia (often a re-export hub), Oman, and even indirect flows from the U.S., though the latter have been suspended at times due to trade policies.
Overall, China’s crude imports averaged 11.1 million b/d in 2024, dipping slightly from 2023 but rebounding in 2025 with the stockpiling push.
Russia alone accounted for over 20% of total imports, with August 2025 seeing 8.71 million tonnes (about 1.8 million b/d) from Moscow.
This shift has reshaped global trade flows, boosting Russian revenues while pressuring OPEC+ dynamics, as Saudi Arabia and Iraq fight to maintain market share.The top 15 suppliers provided 88.6% of China’s crude in 2024, underscoring a reliance on Middle Eastern and Eurasian sources for volume and stability.
Implications for Global Markets
China’s stockpiling is a double-edged sword for the oil market. On one hand, it’s soaking up surplus supply, supporting prices amid a potential glut in Asia.
On the other, it creates “blind spots” for traders, as opaque Chinese data fuels uncertainty and volatility.
Consensus among refiners suggests more additions are possible, but disagreement lingers on the scale.
As 2025 draws to a close, watch for how this build influences OPEC+ decisions and U.S. export strategies. For now, China’s oil vaults are filling—not to the brim, but enough to signal resilience in an unpredictable world. Energy News Beat will keep tracking these developments as they unfold.
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