Although this volume covers only a portion of the shortfall in supplies, the world’s largest oil importer has a significant buffer, according to Bloomberg. The country’s total strategic and commercial reserves are estimated at approximately 1.2 billion barrels.
Over the past year, China has filled its storage facilities to unprecedented levels. The country began drawing down these reserves, reducing them by nearly 25 million barrels between May and June 7, Energy Aspects reported, citing satellite monitoring by Kayrros.
However, reserves were not the only factor playing a key role in easing market pressure. State-owned refineries cut processing volumes to multi-year lows, fuel exports were restricted, and the accelerating shift to electric vehicles continued to reduce domestic demand for petroleum products.
“China’s transportation system has become significantly more resilient to oil shocks than during previous crises,” notes Emma Li, Vortexa’s lead analyst for the Chinese market. She estimates that the spread of electric vehicles has already reduced fuel demand by approximately 1 million barrels per day in the current quarter.
At the same time, Beijing continued to replenish its strategic reserves even during the conflict.
According to Kpler, refiners increasingly relied on commercial stocks instead of purchasing new shipments of crude from international markets. The extent to which state-owned storage facilities were utilized remains unknown.
“We cannot completely rule out the use of part of the strategic reserve,” noted Kpler’s lead analyst, Sumit Ritolia.
Experts believe that China’s state-owned refineries will return to more active oil purchases on the global market after a significant reduction in reserves. However, the timing of such a return will depend on Beijing’s assessment of the situation around the Strait of Hormuz and the prospects for restoring stable supplies through one of the world’s key energy routes.
