How Has China’s Crude Stockpile Given the Oil Market a Safety Net? Will Filling the SPR Help in That Net?

In an era of geopolitical tensions, supply disruptions, and shifting energy dynamics, strategic oil reserves have emerged as critical buffers for global markets. China’s aggressive crude stockpiling strategy has played a pivotal role in stabilizing oil prices and mitigating risks from sanctions and conflicts. But how exactly has this provided a safety net? And could the United States’ efforts to refill its Strategic Petroleum Reserve (SPR) complement this global safeguard? This article explores these questions, delving into China’s import trends from sanctioned suppliers like Russia, Iran, and Venezuela over recent years, while also examining the oil supply-demand balance and price forecasts for 2026.

China’s Stockpiling: A Global Buffer Against Volatility

China, the world’s largest crude oil importer, has ramped up its stockpiling efforts in 2025, creating a substantial cushion for the international oil market.

By accelerating purchases and storage, Beijing has effectively removed significant volumes from circulation, supporting prices amid potential oversupply from OPEC+ production increases or other global factors.

This strategy has been particularly vital in the face of U.S. sanctions on key exporters, providing a “sanctions safety net” by absorbing discounted crude that might otherwise flood the market or exacerbate shortages elsewhere.

Analysts note that China’s expanding storage capacity—estimated to have offset downward price pressures from rising global supply—has helped prevent steeper declines in benchmarks like Brent crude.

For instance, in the first nine months of 2025, China’s average crude imports rose by 2.6% year-over-year, much of which has flowed into reserves rather than immediate consumption.

This stockpiling not only bolsters China’s own energy security but also stabilizes global prices by acting as a demand-side stabilizer during turbulent periods, such as those triggered by Middle East conflicts or trade disputes.

In essence, China’s reserves have become a de facto global safety net, absorbing shocks that could otherwise ripple through supply chains.

China’s Imports from Sanctioned Sources: Volumes and Resilience

Despite Western sanctions on Russia, Iran, and Venezuela, China has maintained and even increased its oil imports from these nations over the past five years, leveraging discounted prices to fuel its stockpiling ambitions. The share of sanctioned crude in China’s imports nearly doubled from 2019 to 2024, rising from around 12% in 2020 to 21% in 2022, and continuing to climb.

This trend has saved China billions—approximately $10 billion in 2023 alone—while sustaining supply flows amid global restrictions.

Russia has been the standout supplier, with imports soaring 55% year-over-year to a record in May 2022, displacing Saudi Arabia as China’s top source.

Overall, China’s crude imports from Russia grew at a compound annual rate far exceeding the 6.2% average for total imports between 2010 and 2024.

By 2022, amid the Ukraine conflict, Russia became China’s leading oil provider, with total imports rising nearly 12% that year to 10.8 million barrels per day (bpd).

Iran and Venezuela have also seen steady demand from Chinese buyers, particularly independent “teapot” refineries, which sourced 98% of their crude from these sanctioned trio in 2023.

However, competition from cheaper Russian oil has squeezed Iranian exports to China since 2022, highlighting the fluid dynamics of this trade.

Sanctions have aimed to curb up to 4 million bpd from these countries, but China’s purchases—often rebranded or shipped via shadow fleets—have kept volumes flowing, underscoring Beijing’s role in blunting the impact of restrictions on global markets.

Filling the U.S. SPR: Bolstering the Global Safety Net?

The U.S. Strategic Petroleum Reserve, designed as an emergency buffer against supply interruptions, has drawn scrutiny for its depleted state—down to about 348 million barrels in mid-2023 from 568 million in early 2022.

Recent sales have generated around $17 billion for the SPR Petroleum Account, funding potential repurchases.

Refilling the SPR could enhance the global safety net by increasing overall reserve capacity, potentially stabilizing prices during crises and complementing China’s stockpiling efforts.

However, the impact may be limited. As a net oil exporter in 2024, the U.S. is no longer bound by international emergency reserve requirements.

Refilling could create “economic carry” in futures markets, incentivizing storage and supporting prices in the short term.

Yet, historical analyses suggest net benefits from SPR management are modest, potentially positive only in extreme scenarios.

Compared to China’s aggressive approach, U.S. policy has been more reactive, but coordinated refilling could amplify the collective buffer against disruptions, especially if aligned with allies like India.

Supply vs. Demand Outlook for 2026: Heading Toward a Glut?

Looking ahead to 2026, global oil markets appear poised for oversupply, with projections painting a picture of building inventories and subdued demand growth. The International Energy Agency (IEA) forecasts global oil demand to rise by about 700,000 bpd in 2026, reaching 104.4 million bpd, down from earlier estimates due to slower economic momentum in key regions like China.

On the supply side, non-OPEC+ production is expected to grow by 1.2 million bpd, contributing to a potential surplus of up to 4 million bpd.

The U.S. Energy Information Administration (EIA) echoes this, predicting rising inventories through 2026 and a supply increase of around 3 million bpd in 2025 alone.

OPEC, however, offers a more bullish view, anticipating demand growth of 1.4 million bpd in 2026, contrasting sharply with the IEA’s gloomier outlook.

Major oil firms like BP, Eni, and TotalEnergies have cautioned that the predicted “2026 glut” may be overstated, emphasizing resilient demand drivers.

Overall, the balance tilts toward surplus, potentially exacerbated if OPEC+ unwinds cuts.