China’s Strategic Oil Reserve: Largest in the World: Data and Comparisons with the U.S.

  

    China’s moves to stockpile oil proved advantageous following the disruptions in the Strait of Hormuz. It is estimated that China holds by far the world’s largest strategic oil reserve at 1.3 billion barrels. That is equivalent to about 3.6 million barrels per day for a year. While that is a lot of oil, it is still far less than the oil produced by the U.S., 23.6 million barrels per day. China also produces about 4.3 million barrels per day, but its total production and strategic reserve are less than a third of U.S. production. China consumes over 16 million barrels per day, about four times what it produces. The U.S., in contrast, consumes about 20.6 million barrels per day, about 2.7 million barrels per day less than it produces, and it exports the excess. I made the graph below that compares these numbers. It shows that oil exports from the U.S. triple China’s strategic oil reserves. It also suggests that increased exports from the U.S., along with strategic oil releases around the world of 400 MMBbls, including 172MMBbls from the U.S., have done the most to stabilize oil markets. Japan and Europe, which also have significant strategic oil reserves, contributed. While China’s strategic oil reserves helped to buffer it from high oil prices, they did not tap into them. Such a large SPR is necessary for a country whose mass consumption of oil far exceeds its production. 

     The following graph shows strategic oil reserves by country before the recent drawdowns.

     An article in Outlook Business Desk suggests that China cut its oil imports by 40% in June and that buffered by its use of strategic reserves, its growing domestic production, and its growing adoption of EVs. Of course, high petrol prices will make EVs more competitive. However, these three buffers combined are only a temporary reprieve for a country as reliant on oil imports as China. Its loss of 5-6 MMBbl/day of imports is probably not sustainable in the long term. While China has not tapped its SPR like the U.S., Japan, and Europe have, it has tapped into commercial and corporate reserves at refineries, which include several hundred million barrels. They have also cut exports of refined products. This is offsetting a 40% reduction in imports. At some point, that lost imported oil will have to be replaced to meet demand. When is the question?  

     According to Wikipedia:

“China's strategic petroleum reserve (SPR) remained nearly unchanged between the start of the Iran war and June 2026. To ensure domestic supplies without using strategic reserves, China halted its supplies of refined oil products to other countries, while using corporate stockpiles, outside its official SPR of 1.23 billion barrels, to supply domestic needs. There could also be other previously unreported reserves in China. China's growing renewable energy sector and electric vehicle industry have also reduced the demand for petroleum products. The reduction in demand caused China to cut its oil imports. Analyst estimates from June 2026 differ on how long this can last: while they claim commercial reserves should last past the end of 2026, some also claim overall reserves will be depleted before then. China's paused demand and stockpile of oil has kept the global oil price below market expectations since the war started, with the aim of avoiding a global recession. Analysts have anticipated low imports even shortly after the war's end. The country's future buying decisions are likely to influence the global crude price.”

     A July article by Rand Europe explores how China could use its large SPR for geoeconomic leverage, but I would caution that the leverage is limited for a country so reliant on imports. It may give them leverage compared to other net importers such as India, which imports 90% of its oil. I think such geoeconomic leverage will be quite limited. They do mention that when China’s oil demand drops, probably sometime in the 2030s, I’m guessing, due to more electrification and nuclear power, its SPR can provide more leverage. However, a large net importer will never enjoy the leverage of a net producer like the U.S. Thus, China’s SPR, while a good and useful tool for China, can do little for world markets, except temporarily reduce world demand.

     China does understand the value of its SPR and has been loading it up since late 2025. Ongoing projects in 2025-2026 will add about 169 million BPD in new storage capacity. China’s buildup of its SPR is likely a response to the Russia-Ukraine war, and it is helping cushion it during the Iran war as well. Low oil prices in 2025 spurred Chinese buying for its SPR. China also diversified its import sources in 2025, which aided it in the 2026 disruptions. China also maintains some secrecy about its stored oil reserves, and many people believe they have more oil stored than indicated. The “several hundred million barrels” of commercial and corporate reserves are part of that.

 

References:

 

Who Holds the World’s Largest Strategic Oil Inventories in 2026? Economics Insider. May 18, 2026. Who Holds the World’s Largest Strategic Oil Inventories in 2026?

China's strategic petroleum reserve as a geoeconomic tool: A 'what if' exercise. Ismael Arciniegas Rueda, Henri van Soest, and Karishma V. Patel. Rand. July 21, 2026. China's strategic petroleum reserve as a geoeconomic tool: A 'what if' exercise | RAND

Strategic petroleum reserve (China). Wikipedia. Strategic petroleum reserve (China) - Wikipedia

China Cut Oil Imports By 40% Amid Hormuz Crisis; Here’s How It Pulled It Off: As the Strait of Hormuz crisis disrupts global oil flows, China’s massive reserves, record domestic output and rapid EV adoption have helped it absorb the shock better than India. Outlook Business Desk. August 10, 2026. China Cut Oil Imports By 40% Amid Hormuz Crisis; Here’s How It Pulled It Off – Outlook Business

China accelerates oil reserve site build amid stockpiling drive. Reuters. October 7, 2025. China accelerates oil reserve site build amid stockpiling drive | Reuters