Why China is hoarding over 1 billion barrels of oil as US sanctions hit Russia

Energy self-sufficiency has long been a national priority for China, which imports roughly 70% of the oil it consumes.

China has spent most of this year quietly stockpiling crude at a record pace — a move that could soften the blow from the latest US sanctions on Russian energy. During the first nine months of 2025, China imported an average of more than 11 million barrels of oil a day, surpassing even Saudi Arabia’s daily output. Analysts estimate that between one and 1.2 million barrels a day were diverted into storage, giving Beijing a growing buffer against global disruptions, the Wall Street Journal reported.

The timing is strategic. Oil prices dropped near five-year lows in October, with Brent crude hovering around $65 a barrel. That dip — combined with fears that Ukraine’s drone attacks could hit Russian production — made it an ideal window for China to top up its tanks.

Energy security at the core of Beijing’s strategy

Energy self-sufficiency has long been a national priority for China, which imports roughly 70% of the oil it consumes. President Xi Jinping has repeatedly warned that “the energy rice bowl must be held in our own hands,” emphasizing domestic control of vital supplies.

China began building its strategic petroleum reserve in 2004, and after two decades of expansion now maintains vast storage sites across cities such as Zhoushan and Dalian. While Beijing keeps the exact figures secret, most independent estimates put its combined strategic and commercial stocks between 1.2 and 1.3 billion barrels — roughly two months of national demand.

According to Rystad Energy, China’s total storage capacity now exceeds 2 billion barrels, with just about 60% currently filled. Another 124 million barrels of capacity are expected to come online by year-end, giving Beijing ample room to continue stockpiling into 2026.

Global ripple effects and a quiet market floor

China’s aggressive buying has helped put a floor under global oil prices despite a supply glut. The International Energy Agency projects an oversupply of 3.7 million barrels a day this quarter, driven partly by increased output from OPEC and its allies. Analysts say if China stopped buying tomorrow, crude prices could quickly tumble toward $50 a barrel.

At the same time, the US is struggling to rebuild its own emergency reserves, which have fallen to their lowest in four decades. President Trump had pledged to refill America’s Strategic Petroleum Reserve “to the top,” but so far, only a small purchase has materialized.

Still buying Russian oil — and paying in yuan

Despite Washington’s new sanctions on Rosneft and Lukoil, Chinese refiners continue to buy Russian crude, mostly settled in yuan. Many independent “teapot” refiners rely on Chinese regional banks and domestic customers, insulating them from dollar-based penalties.

For now, China’s steady stockpiling acts as a quiet stabilizer in global markets. Analysts expect the buildup to continue well into next year, ensuring Beijing has both leverage and security — whatever the next geopolitical shock may bring.