China’s Oil Reserves Help Cushion the Impact of the Worldwide Energy Crisis

China's Energy Security: Resilience Amid Middle East Turmoil

Contrary to common belief, China—the globe’s largest importer of crude oil and LNG—is not as dependent on Middle Eastern energy supplies as it may seem.

For months, China has been steadily building up its oil reserves, diversifying both its sources and transportation routes for oil and gas, and accelerating the adoption of electric vehicles. These efforts have collectively reduced the nation’s reliance on fuel for road transport.

Withstanding Supply Shocks

As tensions in the Middle East disrupt shipments through the vital Strait of Hormuz, analysts highlight that China is better positioned to weather these shocks than regions such as Europe, India, Japan, South Korea, or Southeast Asia.

Strategic Oil Reserves: A Robust Buffer

Despite being the world’s top crude importer, China’s substantial stockpiles—estimated at 1.2 to 1.3 billion barrels—could sustain the country for up to four months, according to Rush Doshi of the Council on Foreign Relations. This buffer proved valuable when oil prices briefly soared to $118 per barrel.

Doshi notes that over the past two decades, China has actively reduced its dependence on maritime oil shipments. Today, pipelines and a growing share of renewables in the energy mix mean that only about 40-50% of China’s seaborne crude imports pass through the Strait of Hormuz.

China’s strategy of accumulating oil in both strategic and commercial reserves has paid off, especially amid the unpredictable conflict in the Middle East.

By purchasing discounted crude—including sanctioned oil—China has partially shielded its economy from short-term supply interruptions. Over the past year, Beijing has taken advantage of lower global prices and even steeper discounts on oil from Iran, Venezuela, and Russia to bolster its reserves.

Unlike the United States, China does not publicly disclose its inventory levels. Analysts estimate reserve volumes by comparing total supply (domestic output plus imports) with refinery throughput.

Inventory Insights

Emma Li, Lead China Oil Market Analyst at Vortexa, estimates that China currently holds about 1.3 billion barrels of crude in onshore storage—enough to cover roughly four months of seaborne imports at 2025’s average rate.

Diversifying Oil Sources

Li points out that China’s crude supply system is notably resilient to temporary disruptions at the Strait of Hormuz, thanks to a mix of diversified suppliers, ample onshore inventories, and steady pipeline deliveries from Russia and domestic sources.

In the lead-up to the recent conflict, China reduced its reliance on oil passing through Hormuz by ramping up purchases of Russian crude, which bypasses the Middle Eastern chokepoint. Vortexa data shows that the proportion of China’s seaborne imports transiting the Strait has dropped from 39% in 2025 to about 33% now, as Russian seaborne crude imports climbed from 1.2 million to 1.8 million barrels per day.

Private Chinese refiners have increased their purchases as other Asian buyers pulled back, further reducing dependence on Iranian oil linked to Hormuz.

Comparative Exposure in Asia

Although China leads the world in crude imports, its exposure to disruptions at Hormuz is lower than that of other Asian nations. India, for example, sources about 60% of its crude from the Middle East, while Japan’s reliance is as high as 90%.

China continues to import significant volumes of Iranian and Russian oil, much of which is stored on tankers near its coastline. Independent refiners remain the primary buyers of Iranian crude, and China has opportunistically acquired Russian oil that India temporarily avoided due to U.S. pressure—though India has since resumed purchases.

According to Kpler data cited by Bloomberg, nearly 40 million barrels of sanctioned crude from Iran, Russia, and Venezuela are currently held in floating storage near China, with over three-quarters of these tankers carrying Iranian oil. This represents a 17% increase compared to the week before the Middle East conflict escalated.

The proximity of these floating reserves and the willingness of Chinese refiners—especially private ones—to buy sanctioned oil help cushion the impact of price spikes and supply interruptions from Hormuz.

Sector-Specific Vulnerabilities

Vortexa notes that the impact of supply shocks varies across China’s refining sector. Refineries heavily reliant on Hormuz-linked supplies or with limited alternatives may need to accelerate maintenance or reduce output.

While a nationwide disruption is unlikely in the immediate term, a prolonged closure of the Strait of Hormuz could force selective refinery slowdowns, shift trade flows, and tighten product balances across Asia.

By Tsvetana Paraskova for Oilprice.com

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