Waitforlight | Second | Getty Pictures
China has quietly amassed the world’s largest stockpile of crude oil.
That is no imply feat for a rustic that can also be the globe’s largest importer of vitality.
It brings a recent dynamic to Beijing’s relations with the USA, as Premier Xi Jinping prepares to host President Donald Trump for a high-stakes state go to on Could 14 and 15.
The “Teapot” Social gathering
There may be already controversy. China’s Commerce Ministry banned Chinese language corporations from complying with U.S. sanctions on small refineries that buy Iranian crude. The so-called “teapot refineries” have been inspired by Chinese language authorities to import Iranian oil as a result of they’re seen as proof against international sanctions, in keeping with Teneo. The analysis home warns that China’s non-compliance with the sanctions might immediate Washington to launch a second spherical of restrictions to clamp down on the Sino-Iranian commerce.
Stockpiles
Oil markets are now not coping with a circulation disruption, however with a quickly compounding inventory shock, in keeping with Kpler. The analytics group says that the majority Center East cargoes loaded earlier than the struggle have now been discharged, that means the stock drawdown will speed up and native refining will gradual.
The U.S. Power Data Administration (EIA) estimates that China added a median of 1.1 million barrels per day of crude oil to strategic reserves in 2025, with “preliminary authorities information indicating that China has continued to construct inventories in 2026” forward of the Iran battle.
Which means that authorities and business oil stockpiles in China averaged round 360 million barrels in December 2025, which compares to America’s strategic reserves of almost 414 million barrels over the identical interval.
China’s crude shopping for binge has helped to stop even greater spikes in oil costs amid the Strait of Hormuz impasse. It has additionally offered a lifeline to Asian importers which were most instantly impacted by the halt in Center East vitality deliveries.
Crude Diplomacy
For China, heightened tensions with the U.S. and sanctions-related disruption imply strategic petroleum reserves are performing as a hedge towards provide constraints, value volatility and forex volatility, in keeping with the Oxford Power Institute.
BUSAN, SOUTH KOREA – OCTOBER 30: U.S. President Donald Trump and Chinese language President Xi Jinping react after posing for images forward of a bilateral assembly at Gimhae Air Base on October 30, 2025 in Busan, South Korea. Trump is assembly Xi for the primary time since taking workplace for his second time period, following months of rising pressure between each international locations. (Photograph by Andrew Harnik/Getty Pictures)
Andrew Harnik | Getty Pictures Information | Getty Pictures
Extra to observe this week:
Monday: EU Overseas Affairs Council assembly
Tuesday: German inflation information, U.S. inflation information
Wednesday: OPEC Month-to-month Oil Market Report, IEA Oil Market Report
Thursday: U.Okay. GDP information, BRICS Overseas Ministers assembly
Friday: Credit standing evaluations: Germany, Italy and Ukraine
