China’s accelerated crude inventory builds in 2025 might turn out to be useful on the finish of this yr as international oil flows are being redirected once more within the wake of the U.S. sanctions on Russia’s high oil companies.
China, the most important purchaser of Russian crude, has a cushion to melt the blow from the sanctions, though it’s unlikely it could halt its imports from Russia.
However the stockpiles in China, estimated at between 1.2 billion and 1.3 billion barrels in strategic and industrial reserves, have put a flooring underneath oil costs in current months, regardless of fears of an imminent glut.
The reserves China has amassed to this point this yr might offset short-term provide disruptions, analysts say, because the U.S. sanctions goal the 2 largest oil producers in Russia, Rosneft and Lukoil.
“China’s present strategic petroleum reserve and industrial shares already present a significant buffer towards short-term provide disruptions,” Kelly Xu, a commodity and power strategist at Alpine Macro, advised The Wall Street Journal.
Throughout the first 9 months of 2025, China boosted common crude oil imports by 2.6% from a yr earlier, regardless of lackluster gasoline demand and forecasts that gasoline and diesel demand is peaking.
China’s crude stockpiling has supported worldwide oil costs into the $60-$70 a barrel vary, regardless of commerce wars, considerations concerning the economic system, and hovering provide from each OPEC+ and non-OPEC+ exporters.
In contrast to america, China doesn’t report inventories. Analysts are taking a look at total provide (home manufacturing plus imports) and refinery processing charges to estimate how a lot crude goes into strategic or industrial reserves and the way a lot is being processed into fuels.
After a gradual begin to the yr, China started boosting its crude oil imports in March-April and has stored elevated import ranges since then. The important thing driver has been crude stockpiling, not a serious rebound in demand, in keeping with analysts.
Greater Chinese language purchases have helped assist oil costs regardless of the OPEC+ manufacturing hikes and chronic considerations concerning the development charge of world oil demand amid inconsistent U.S. commerce insurance policies and tariffs.
From March onwards, “we began to see a really spectacular charge of stockpiling, like shut to at least one million barrels per day,” Frederic Lasserre, international head of analysis and evaluation at commodity buying and selling large Gunvor, told the viewers of the APPEC 2025 convention in Singapore in September.
China will proceed amassing crude oil in strategic and industrial reserves nicely into 2026, in keeping with Lasserre and different analysts.
