China’s oil stockpiles can run its $20T economy for 4+ months

China’s preparedness offers a degree of protection as the Iran crisis intensifies. Years of strategic planning have resulted in substantial crude stockpiles, potentially capable of sustaining its $20 trillion economy for a minimum of 120 days. Concurrently, Beijing has diversified its oil suppliers beyond the Middle East, and subdued inflation provides a third layer of defense, giving policymakers flexibility to handle any short-term disruptions.

China, the world’s largest oil importer, prioritizes national security and wartime readiness. Rising tensions with the U.S. since Donald Trump’s presidency have driven Beijing to increase its reserves. Over the past year, China has been capitalizing on lower global oil prices, including those from sanctioned suppliers such as Russia, Iran, and Venezuela.

The actual size of China’s oil reserves remains confidential. The last official update in 2017 indicated a strategic petroleum reserve (SPR) of 238 million barrels. However, according to a February Reuters report, citing data from research firms like Kpler, current stockpiles could be as high as 1.3 billion barrels, equivalent to over four months of imports. These figures would include commercial reserves held by state-owned companies such as PetroChina and Sinopec.

The link between insecurity and stockpiling is not exclusive to China. Japan, an island nation vulnerable to disasters and import disruptions, maintains a reserve that can cover over 250 days. However, almost 95% of Japan’s crude oil originates from the Middle East. China, in contrast, imported oil from 49 different countries last year, according to China Customs data. Notably, 43% of its imports passed through the Strait of Hormuz. In the event of a conflict in the Persian Gulf, Beijing could increase its reliance on Russia.