China is steadily increasing its crude oil stockpiles as its refining activity remains significantly lower than the volume of crude it receives from imports and domestic production. This strategy provides the world’s largest oil importer with flexibility to reduce import volumes in the coming months, particularly as crude prices surge due to escalating tensions in the Middle East.
According to official data analyzed, China’s crude surplus reached 1.4 million barrels per day (bpd) in May — marking the third consecutive month the surplus has exceeded one million bpd. This indicates a growing gap between crude available and refinery throughput.
The recent spike in crude prices was triggered on June 13, when Israel launched air strikes on Iran, which responded with drone and missile attacks. While Iran’s oil production and export infrastructure have yet to be directly impacted, Brent crude futures have jumped nearly 6% since June 12, trading around $73.58 per barrel in Asian markets on Tuesday.
Historically, Chinese refineries have reacted to rapid crude price increases by cutting back on imports and drawing down from stockpiles. However, due to the typical two-month lag between arranging shipments and delivery, any import reductions in response to recent price hikes will likely be visible only from August onwards.
China’s official data shows refinery throughput declined from 14.12 million bpd in April to 13.92 million bpd in May — also down 1.8% compared to the previous year. Meanwhile, crude imports dropped from 11.69 million bpd to 10.97 million bpd over the same period. Domestic crude production edged slightly higher from 4.31 million bpd in April to 4.35 million bpd in May.
Combining imports and domestic output, China had 15.32 million bpd of crude available in May. Subtracting refinery processing from this total leaves a surplus of roughly 1.4 million bpd, which presumably is being added to strategic and commercial storage, although exact stockpile volumes are not publicly disclosed.
In the first five months of 2025, China’s crude surplus averaged 990,000 bpd — up from 880,000 bpd for the first four months. Notably, during January and February, refineries drew down about 30,000 bpd from inventories, marking the first inventory draw in 18 months. However, large surpluses in March through May have reversed that trend.
It is important to note that some surplus crude may be processed in facilities not captured by official statistics. Still, the data clearly shows China has been importing crude at rates exceeding immediate refining demand since March, building up reserves amid volatile market conditions.
Price sensitivity is evident in forecasted crude imports for June. LSEG Oil Research projects arrivals of 11.72 million bpd — an increase of 750,000 bpd compared to April’s official figure. This rise reflects lower crude prices during cargo bookings for June deliveries. Brent futures had fallen from $75.47 a barrel in early April to a four-year low of $58.50 in early May, encouraging Chinese refiners to secure additional shipments.
Many of these shipments will arrive in June and July, which could give the appearance of recovering crude demand. However, refinery throughput figures suggest much of this oil is destined for storage rather than immediate processing.
With the recent price surge tied to Middle East tensions, China’s refiners are likely to reduce purchases going forward and may seek discounted crude supplies from sanctioned producers like Russia and Iran.
As global oil markets continue to react to geopolitical risks, China’s growing stockpiles provide it with a strategic buffer and the potential to influence future crude import volumes and pricing dynamics.
