Energy security, geopolitics: behind China's crude oil stockpiling, Pg13.

Key Highlights:

• China has been heavily stockpiling crude oil in 2025, storing nearly 160 million barrels worth over $10 billion in the first nine months.
• This stockpiling is driven by energy security concerns, taking advantage of subdued oil prices (under $70 per barrel since April 2025) and growing storage capacity.
• China's total crude storage capacity has risen from 1.4 billion barrels in 2015 to 2.03 billion barrels by the end of 2024, with a further 124 million barrels expected by the end of 2025.
• China buys about a fifth of its oil from countries under sanctions like Iran, Venezuela, and Russia, and the stockpiling helps manage supply risks.

Detailed Insights:

• China's decision to stockpile crude oil is part of its broader energy security strategy, aiming to ensure a stable supply amid geopolitical uncertainties.
• A law passed in January 2025 mandates state and private refiners to maintain government-supervised "social responsibility" reserves, further encouraging stockpiling.
• China may be aiming to grow its stockpile to cover six months of oil imports, or roughly 2 billion barrels, providing a buffer against supply disruptions.
• Stockpiling allows China to manage oil imports more efficiently, buying when prices are low and drawing from reserves when prices are high, influencing global supply and price dynamics.
• Trade tensions with the US have disrupted imports of ethane and propane, key petrochemical feedstocks, making crude oil stockpiles a means to manufacture these locally.
• The possibility of a conflict involving Taiwan is also a factor, as stockpiles would provide a cushion against potential sanctions and disruptions to energy imports.
• While there has been a recent slowdown due to limited import quotas for independent refiners, China is expected to resume building stocks in 2026, driven by geopolitical risks and a crude surplus.

Key Concepts Involved:

• Energy Security: Measures taken by a nation to ensure a reliable and affordable supply of energy.
• Crude Oil Stockpiling: Accumulation of crude oil reserves as a strategic resource.
• Geopolitics: The influence of geography on international relations and power dynamics.