The world’s top importer of crude oil and LNG, China is not as exposed and vulnerable to energy supplies from the Middle East as it might think.
China has been working for months to diversify oil and gas sources and routes and has increased the electrification of transportation, which has reduced demand for road transportation fuel.
As the Middle East crisis cuts off supplies through the world’s most important oil and gas hub, the Strait of Hormuz, China is more resilient to a supply shock than other regions and countries, including Europe, India, Japan, South Korea, or Southeast Asia, analysts say.
Inventory Buffer
One might think that China, as the world’s largest oil importer, would feel the shortfall in supply immediately and quickly.
However, its estimated supply buffer 1.2-1.3 billion barrels Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations, told CNBC on Monday that when oil prices briefly hit $118 a barrel, the price of crude oil in strategic and commercial reserves could last up to four months.
“China has worked over the past 20 years to reduce its dependence on offshore oil flows,” Doshi said.
According to Doshi, with a combination of pipelines and renewable energy, China depends on 40-50% of its marine crude oil imports through the Strait of Hormuz.
In addition, China has been holding crude oil reserves in strategic and commercial reserves for nearly a year. This oil deposit is paying off in an unpredictable and already very chaotic war in the Middle East.
Related: A little-known US company has won a major Pentagon contract in a rare earth race
China’s energy security strategy and plan to quickly buy cheap crude oil, including approved barrels, have helped the world’s second-largest economy, to some extent, avoid temporary supply disruptions.
Beijing is believed to have been stockpiling crude in commercial and strategic reserves for nearly a year — taking advantage of low international prices and even lower prices for curbed supplies from Iran, Venezuela and Russia.
Unlike the United States, China does not report inventories. Analysts look at total supplies (domestic production and imports) and oil refining rates to estimate how much crude oil goes into strategic or commercial reserves and how much is processed into oil.
Analysts estimate China’s total reserves to be between 1.2 billion barrels and 1.3 billion barrels.
“China currently has 1.3 billion barrels of crude oil reserves onshore, equivalent to about four months of seaborne imports at average 2025 prices,” Emma Li, chief China oil market analyst at Vortexa, wrote in an analysis on Monday.
Diversification of the raw stream
“China’s overall crude oil supply system exhibits significant resilience to temporary disruptions in the Strait of Hormuz, supported by diversified suppliers, significant onshore reserves, and stable pipeline flows from Russia and domestic production,” Li said.
In the weeks before the war, China had reduced the flow of crude oil through the Strait of Hormuz, largely thanks to an increase in purchases of Russian crude oil that does not travel through the choke point in the Middle East.
According to Vortexa data, China’s share of seaborne imports for transit through the Strait of Hormuz has declined from 39% in 2025 to about 33% now.
That’s because Chinese imports of Russian crude have increased from about 1.2 million barrels per day in 2025 to about 1.8 million barrels now.
Related: No Magnets, No Drones: How China Controls the Future of War
“Private Chinese refiners stepped up purchases as weak demand from other Asian buyers created opportunities and reduced reliance on Hormuz-bound Iranian supplies,” Vortexa Lee said.
Despite being the world’s top crude oil importer, China has been less exposed to the Hormuz crisis than many other buyers in Asia, including India and the developing economies of Japan and South Korea. India depends on the Middle East for 60% of its crude oil, while Japan’s monopoly is 90%.
China also relies on Iranian and Russian crude oil, large quantities of which are already stored in tankers near China’s coasts.
Independent refiners in China have been and continue to be the biggest buyers of Iranian oil, while China also opportunistically scooped up Russian oil that left India under US pressure for several months, but is now going back to buying with US blessing.
About 40 million barrels of oil from Iran, Russia and Venezuela are stored in tankers near China. Crude stockpiles, which were three-quarters of Iran’s tankers full of oil, rose 17% from the week before the Middle East war broke out, according to Kepler data cited by Bloomberg on Monday.
Proximity to China and the willingness of Chinese refiners, especially private crude processors, to buy crude could ease China’s short-term pain from rising oil prices and the Hormuz pipeline shutdown – to some extent.
According to Vortexa, Beijing’s vulnerability to the current supply shock varies widely across the refining sector.
Refineries with hormuz-dependent supply chains or with limited alternative options can accelerate maintenance schedules or reduce processing costs.
“Overall, while China is unlikely to face an immediate nationwide refinery disruption, the long-term closure of the Strait of Hormuz is likely to reduce selective refining, alter crude trade flows, and tighten regional output imbalances across Asia.” Vertexa Lee mentioned.
By Tsvetana Paraskova for Oilprice.com
More great reading from Oilprice.com
Oil Price Intelligence brings you signals before they become known. This is the same expert analysis read by experienced traders and political consultants. Get it twice a week for free, and you’ll always know why the market is moving against everyone else.
You get geopolitical intelligence, secret inventory data, and market waves that move billions – and we’ll send you $389 in premium energy intelligence, just for joining. Join 400,000+ readers today. Get instant access by clicking here.
