China’s Crude Hoarding Is Propping Up Oil Prices

Core Insights - China significantly supported oil prices in 2025 by accelerating crude stockpiling and absorbing additional supply from producers, preventing a price collapse despite increased supply from the Americas and sanctioned countries [1] Group 1: Oil Prices and Stockpiling - International crude benchmarks remained stable at approximately $60 per barrel, a price point that China considers favorable for increasing its crude purchases for storage [2] - In December 2025, China reached its highest monthly crude stockpiling since June 2020, indicating a strong commitment to building reserves [6] - The stockpiling rate surged to 2.67 million barrels per day in December, up from 1.88 million barrels per day in November, reflecting China's aggressive accumulation strategy [8] Group 2: Economic Context and Demand - China's crude oil imports hit an all-time high last year, despite weak transportation fuel demand and economic challenges, influenced by U.S. tariff policies and global market volatility [3] - The pace of China's stockpiling is influenced by oil prices, with a noted slowdown in accumulation when prices exceed the high $70s to $80 per barrel range [5] - The trend of increased stockpiling began in March and April 2025, as China's immediate oil demand remained weak while imports continued to rise [9] Group 3: Strategic Implications - China has the potential to further increase its crude stockpiling to shield itself from market and geopolitical uncertainties, particularly given the unpredictable nature of U.S. foreign and trade policy [4] - Analysts estimate China's crude inventory levels based on overall supply and refinery processing rates, as the country does not publicly report its inventories [7]