China has significantly increased crude stockpiling this year. The crude import volumes going into the world’s biggest importer have held relatively strong despite lukewarm demand and an imminent peak in demand for road transportation fuels.
China’s crude stockpiling has supported international oil prices into the $60-$70 a barrel range, despite trade wars, concerns about the economy, and soaring supply from both OPEC+ and non-OPEC+ exporters.
But supporting oil prices has hardly been China’s motive to amass crude in storage tanks.
The stockpiling has been noticed by the market, industry executives, and analysts who have suggested several reasons about why the world’s biggest importer of crude is buying much more crude than it currently consumes.
China’s Massive Crude Stock Building
Unlike the United States, China does not report inventories. Analysts are looking at overall supply (domestic production plus imports) and refinery processing rates to estimate how much crude is going into strategic or commercial reserves and how much is being processed into fuels.
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After a slow start to the year, China began boosting its crude oil imports in March-April and has kept elevated import levels since then. The key driver has been crude stockpiling, not a major rebound in demand, according to analysts.
Higher Chinese purchases have helped support oil prices despite the OPEC+ production hikes and persistent concerns about the growth rate of global oil demand amid inconsistent U.S. trade policies and tariffs.
From March onwards, “we started to see a very impressive rate of stockpiling, like close to one million barrels per day,” Frederic Lasserre, global head of research and analysis at commodity trading giant Gunvor, told the audience of the APPEC 2025 conference in Singapore last month.
China will continue amassing crude oil in strategic and commercial reserves well into 2026, according to Lasserre. The filling rate is about 60%, which suggests that China has room for additional stockpiling of inventories, Lasserre said.
China’s substantial stockpiling this year has been underpinned by a new Energy Law, enacted in January 2025, aimed at improving its energy security, the International Energy Agency (IEA) said last week.
“With limited storage capacity available in the country’s strategic petroleum reserves (SPR), oil companies are now mandated to increase oil stocks at their own commercial storage facilities, effectively positioning the private firms as long-term strategic storage partners for the government,” Toril Bosoni, Head of Oil Industry and Markets Division at the IEA, wrote in a commentary on the global oil overhang.
China has room for more stock building and is also expanding its crude storage capacity, expecting to build 11 new storage sites over the next two years.
China’s Motives to Amass Crude
Analysts have pointed to several factors driving increased Chinese stockpiling.
Earlier this year, the slump in oil prices and high uncertainty over trade, geopolitics, and the trade clash with the United States prompted China to accelerate storage filling.
The massive monthly stock builds began in April, as uncertainty and lower oil prices prompted aggressive stockpiling by Chinese majors, while sanctioned crude imports held near record highs, Emma Li, lead market analyst at Vortexa, said in early May.
China has also been amassing crude from the sanctioned exporters Russia and Iran. That crude is cheaper as it is being offered at discounts to the few willing buyers, China being the biggest of them all. Beijing has been buying as much cheaper crude as it can amid uncertainties about the U.S. sanctions regime toward Iran and Russia.
Cheaper crude and lower oil prices compared to last year’s levels have been economic incentives for China to increase stock builds.
Energy security has also been at the top of the list of reasons why China is interested in boosting crude in storage.
In recent months, other theories about China’s stock build have emerged, Robin Mills, chief executive of consultancy Qamar Energy, wrote in The National this week.
One of two more outlandish theories, according to Mills, is that China is preparing to withstand some sort of conflict and an oil embargo or halted supplies via the key routes from the Middle East to Asia.
Then there is the theory that China could be preparing for an imminent invasion of Taiwan. This theory was floated as a “conspiracy theory” by Li-Chen Sim of Khalifa University at the DMCC Energy Club seminar in Dubai last week.
According to Qamar Energy’s Mills, “an invasion of the island very soon appears unlikely.”
For China’s stockpiles, the growth appears to have plateaued, Vortexa’s Emma Li said in an analysis last month.
Much of the headline growth in China’s crude oil imports has come from stockpiling rather than real consumption, with underlying refining demand broadly flat—or even weaker in some months—compared with last year, when no SPR mandate was in place, according to Li.
However, builds at state-owned refiners appeared to have plateaued in the third quarter, while inventories at Shandong, the home to the independent “teapot” refiners, continue to rise with steady flows from Iran, data from Vortexa showed.
Until new storage in China becomes available next year, the room for stock builds could be limited.
“In short: China’s crude stockpile growth looks set to plateau, leaving imports more closely tied to underlying demand trends rather than storage plays in the months ahead,” Li said.
By Tsvetana Paraskova for Oilprice.com
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