China’s oil stockpiling cushions market as U.S. sanctions hit Russian crude

[Fuel drums and China flag on world map background. 3d illustration]
Rawf8

China has been rapidly expanding its oil reserves in 2025, a buildup that could help shield its economy from new U.S. sanctions on Russian energy exports and tighten global supply, The Wall Street Journal reported Sunday.

Over the first nine months of the year, China imported more than 11 million barrels of crude a day, customs data show, exceeding Saudi Arabia’s daily production. Analysts estimate 1.0 million to 1.2 million barrels a day were diverted to storage, taking advantage of lower prices and concerns over disruptions from Ukraine’s attacks on Russian facilities.

Energy security remains a central priority for Beijing, which depends on imports for roughly 70% of its oil consumption. President Xi Jinping has repeatedly stressed that “the energy rice bowl must be held in our own hands.”

China’s stockpiling has also helped stabilize oil prices, with Brent crude holding near $65 a barrel after touching five-year lows in October. Analysts warn that without China’s demand, prices could have slipped into the low $50s.

Estimates suggest China now holds about 1.2 billion to 1.3 billion barrels in total reserves, roughly 400 million in state storage and 800 million in commercial tanks, using only about 60% of its total 2-billion-barrel capacity.

Despite sanctions on Rosneft and Lukoil, few expect China’s refineries to scale back purchases. Most Russian exports are settled in yuan, insulating buyers from dollar restrictions.

While the U.S. has been slow to rebuild its own emergency reserves, China continues to expand capacity and diversify sources, including discounted crude from Iran and Russia. Analysts at Alpine Macro expect the country’s precautionary buying to continue well into 2026, keeping a floor under global prices even as OPEC+ raises production, the Journal reported.

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