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Colgate-Palmolive CompanyChina's oil reserves give Beijing leverage in Iran war
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China's vast oil stockpiles have allowed Beijing to slash crude imports during the Iran war, helping contain global oil prices and reducing its vulnerability to supply disruptions, The Wall Street Journal reported Friday. China's crude reserves are estimated at between 1 billion and 1.4 billion barrels, equivalent to roughly 120 days of imports, and by some estimates its stockpile last year exceeded U.S. reserves by nearly 600 million barrels. That cushion has allowed China to sharply reduce purchases since the conflict began, with crude imports falling 23% between March and July compared with a year earlier, limiting competition for disrupted supplies and helping restrain prices. China accelerated stockpiling beginning in 2024, adding an estimated 1 million to 1.2 million barrels per day, and purchases from Russia and Iran increased as discounted sanctioned crude became available; between 2022 and 2025, Russian crude imports rose 26% while Iranian imports more than doubled. Beijing began drawing down commercial inventories in early May, with withdrawals averaging around 700,000 barrels per day through mid-August, although aboveground strategic reserves remained largely intact. China has also restricted refined-product exports, with gasoline exports plunging 93% year-on-year in the second quarter, diesel shipments down about 25%, and jet fuel exports halved, while refinery runs fell to roughly 12.5 million barrels per day in June and July from more than 15 million before the war. Beijing has spent years reducing its exposure to imported oil through renewable energy, electric vehicles, high-speed rail and coal-based chemicals, with renewables generating around two-fifths of China's electricity in the first half, but the strategy carries economic costs: China relied on imports for about 70% of its crude before the war, and weaker refining activity is weighing on industrial output, with Macquarie estimating the oil and petrochemical sector accounted for 90% of the second-quarter slowdown in Chinese industrial production.
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