From the port of Singapore to the port of Houston. The entire energy market is asked these days the same question: Why is China buying oil as if there were no morning? The collection is so massive and sustained that analysts have more doubts than certainties.
90% of world oil. So far this year, China has bought about 150 million more barrels than you consume, publishes Bloomberg. At the current price, that is an invoice of 10,000 million dollars in raw that, For what we knowyou don’t need.
To put the data in context, the International Energy Agency estimates that, in the second quarter of 2025, China has absorbed more than 90% of the storage of measurable crude oil worldwide. According to ReutersAugust’s surplus exceeded one million barrels per day.
So that? It is the million dollar question and there is no clear answer. If we attend the Ockham razor, one of the simplest explanations would be that oil is “cheap.” Although prices fluctuate, in terms adjusted to inflation the barrel is at a price similar to that of 20 years ago: $ 64 per barrelaccording to the futures market of the WTI crude.
An explanation is that Chinese government planners, known for their long -term vision, are taking advantage of a golden opportunity to fill their deposits at a reasonable cost. They have where to save it: China has been adding massive storage capabilities with the construction of new tanks and the entry into force of a new law.
A lot of hole to fill. On January 1, the new Energy Law In China. For the first time, the country establishes as a legal obligation that both state and private companies maintain strategic reserves. In essence, the private sector now shares with the government the responsibility of storing raw.
Consequently, there is still a lot of hole to fill. According to him Oil & Gas Journalgovernment strategic reserves are 80% of their capacity, while commercial storage tanks are only 50%.
A “giant”. In case the above reasons were few, analysts have a range of geopolitical explanations. China buys approximately 20% of its oil from countries under western sanctions, mainly IranRussia and Venezuela. He knows that the United States could, at any time, harden control and hinder that flow.
Another theory points to a diversification of its foreign exchange reserves. Instead of continuing to accumulate United States Treasury bonds, China could be investing part of that capital in a physical and strategic asset such as oil, a play similar to its constant purchases of gold, seeking to reduce its exposure to assets linked to the dollar.
Do war drums sound? Here we enter the purest terrain of speculation, but for the most pessimistic analysts, this massive accumulation of reserves only makes sense if Beijing is preparing for a possible military conflict over Taiwan. In that scenario, having full energy pantries is not an option, it is a strategic need.
How it affects us others. The sudden thirst for crude oil has a direct effect on the global market. According to the International Energy Agency, the world is directed downhill and without brakes to a surplus of “unsustainable” production of 2.5 million barrels per day for the second half of 2025, which could reach 3 million in 2026.
Normally, a surplus thus would cause a collapse of prices. But, according to the analysis of Argus MediaChina is acting as a giant sponge that absorbs much of that excess supply and helps maintain the most stable prices than they should.
In summary, either by pure commercial strategy, by legal imperative or in preparation for a conflicting future, China has become the “X factor” of the oil market. While continuing to buy, prices will have a floor. The day I step on the brake, the huge global surplus could flood the market. And no one, except perhaps a few in Beijing, know when that will happen.
Image | Corey Seeman (Flickr, CC BY-C-SA 2.0)
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