China has instructed its state-owned oil firms to increase the country’s strategic crude oil reserves by around 8 million metric tons, or nearly 60 million barrels, according to analytics firm Vortexa and industry sources.
The stockpiling program, which runs from July 2023 through March 2024, would equate to about 220,000 barrels per day of additional crude being added to China’s emergency reserves. This would be one of China’s largest such efforts in recent years.
The five state oil companies tasked with carrying out the stockpiling are CNPC, Sinopec, CNOOC, Sinochem, and Zhenhua Oil. They will be adding the crude to various strategic petroleum reserve (SPR) sites across China, including a new tank farm owned by CNOOC in the key refining hub of Shandong province.
China closely guards information on its SPR levels, but estimates put the current stockpile around 290 million barrels, compared to 372 million barrels in the U.S. strategic reserve. By adding 60 million barrels, China is looking to bolster its energy supply security amid global market volatility.
The move could also provide some support to international oil prices, which have been hovering near two-month highs recently due to factors like the summer driving season in the northern hemisphere. China is the world’s largest crude oil importer, bringing in around 11 million barrels per day.
While details on the stockpiling program remain limited, the directive from Beijing underscores China’s efforts to shore up its strategic energy reserves in the face of potential supply disruptions or price swings.