The ongoing war in Iran, coupled with the resulting chaos in the oil and gas markets, has led to a significant decrease in China’s crude oil imports.
According to the Oilprice Intelligence report cited by Reuters, data from Kpler shows that in May, China’s average daily crude oil import volume was 6.36 million barrels, down from 8.1 million barrels in the previous month and 11.39 million barrels in February before the start of the war.
However, while oil import volume has decreased, the demand has not seen a corresponding decline. Data from Kpler indicates that last month, China’s refineries processed an average of 13.5 million barrels of crude oil per day, a decrease of 154,000 barrels per day from the estimate for April, significantly lower than the processing volume in May 2025, which was reduced by 900,000 barrels per day.
The article points out that well before the US-led coalition launched attacks on Iran, China had been taking advantage of stable oil prices and cheap oil from Russia and Iran, stockpiling large quantities of crude oil significantly exceeding its domestic consumption and export capabilities.
The Chinese Communist Party does not disclose oil inventory data, but experts estimate that based on China’s import volume and refinery operating rates, the country’s daily average crude oil inventory ranged between 900,000 to 1 million barrels last year. This means that China currently has reserves of nearly 1 billion barrels of spare crude oil. Chinese refineries are currently tapping into these inventories to bridge the supply gap and avoid bankruptcy due to excessively high costs.
The expansion of oil reserves by the Chinese Communist Party is a long-term plan. A Reuters report from October last year mentioned that China is constructing up to 11 new oil storage facilities with the goal of adding 169 million barrels of storage capacity by the end of this year. Data from Kpler and Vortexa at the time indicated that the additional storage capacity is equivalent to two weeks’ worth of crude oil imports, increasing oil storage capacity between 180 million to 190 million barrels for the period between 2020 and 2024.
With the outbreak of the Iran war, a sustained shortage in global crude oil supply is expected to emerge, with an increasing number of experts warning that the full impact of the war will become evident in July.
The article suggests that China’s crude oil inventories have to some extent suppressed oil prices, but it is only a temporary measure to curb price increases. China’s crude oil inventories cannot be maintained indefinitely. The future trend of oil prices remains to be observed.