China expanded its crude oil stockpiles over the first two months of the year, thanks to higher imports and a ramp-up in domestic production, Reuters’ Clyde Russell reported, adding that the stock buildout strengthened despite higher refining rates in the period.
Imports of crude oil to China averaged 11.99 million barrels daily, Russell said, adding that domestic production over the period had averaged 4.42 million barrels daily, for a total supply of some 16.41 million barrels daily. Refineries, however, processed an average of 15.17 million barrels daily over January and February.
Citing official data, Russell wrote that China was putting an average of 1.24 million barrels daily in storage in the first two months of the year. This was down from an all-time high of 2.67 million barrels daily, sent to storage in December, but higher than the 2025 average, which stood at 1.13 million barrels.
“China has been very wisely stockpiling a lot of crude last year so they have a buffer to overcome the current crisis,” Jorge León, head of geopolitical analysis at Rystad Energy, told Bloomberg earlier this month.
Despite its comfortable oil stockpile cushion, China has been quick to take steps to tackle the supply squeeze from the Strait of Hormuz closure by suspending fuel exports. The country’s largest refiner, Sinopec, also announced a 10% reduction in run rates. The company accounts for about a third of China’s total refined petroleum product output, with an average processing rate of 5.2 million barrels daily.
Asia, the biggest oil demand center globally, is facing the greatest pain from the closure of the Strait of Hormuz. Overall, the war could force up to 6 million bpd cuts to crude runs across Asia in April, as refineries face severe supply disruption with 65% dependency on Middle East crude, Wood Mackenzie analysts warned last week. That’s under a worst-case scenario in which existing emergency stockpiles are not used, according to Wood Mac.
By Irina Slav for Oilprice.com
