“Before the U.S. attacked Iran, Beijing spent years and tens of billions of dollars amassing the world's biggest stockpile of oil.
Now, with the conflict likely to last for a while, those reserves have given China huge power over the global oil market -- and a critical defense against the West.
By some estimates, China's reserves last year were nearly 600 million barrels bigger than those in the U.S. That stockpile allowed it to slash its oil imports when the war broke out, keeping a lid on global oil prices and safeguarding its economy.
It has been a major vindication for Chinese leader Xi Jinping, who has sought to buttress China against what he sees as a hostile U.S.-led West. For decades, Chinese leaders have worried about the country's reliance on imported crude, most of which transits through straits that the U.S. or other militaries could seek to block in a conflict.
Now, the Iran war has demonstrated that China's muscular energy policy has afforded Beijing a major tool it could use, for instance, in a conflict over Taiwan.
China's stockpiles, combined with its quicker-than-expected shift away from fossil fuels, are making it the most powerful swing buyer in global energy markets. It has slashed imports aggressively, which has prevented crude prices from jumping higher. Chinese crude oil imports fell 23% from March to July versus a year earlier.
As the crisis in Iran unfolded, in China, "almost from day one there was this sense that, 'We are able to manage this. We don't need to panic,'" said Erica Downs, a scholar at Columbia University's Center on Global Energy Policy.
In the future, such power could be wielded in a clash with the U.S. In the event of a war over Taiwan, for example, Beijing's ability to cut oil imports for months could help China resist efforts by the U.S. and its allies to block energy shipments to China.
Most of China's oil imports in recent years traversed the Strait of Malacca, near Singapore. Like the Strait of Hormuz in the Middle East, the narrow waterway is one of several chokepoints where the U.S. or other militaries could seek to block the energy trade.
For China, "oil is not the Achilles' heel we thought it was," said Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies.
China's Foreign Ministry said the priority is restoring peace and stability in the Gulf and Middle East.
China doesn't publish the size of its strategic oil reserves or reveal its oil consumption, forcing analysts to calculate "apparent demand" by adding up official refinery throughput and net imports of refined oil products.
China's refineries cut runs by just 1.6 million barrels a day in the second quarter of 2026 from the same period last year, according to China's National Bureau of Statistics. That is a modest drop compared with the 3.5 million barrels a day drop in imports.
Many economists say the explanation must lie with China's vast crude-oil reserves.
No one knows the exact size of the reserves. Analysts put the total reserves at between 1 billion and 1.4 billion barrels, about 120 days of imports.
Tapping stockpiles likely accounts for about half of China's recent fall in imports, say energy analysts. Other measures include limiting exports of oil products. China's gasoline exports plunged 93% in the second quarter compared with a year earlier, diesel exports are down by a quarter and jet-fuel exports have halved, according to Chinese customs data.
Unable to export their oil products and stuck with price caps that have hammered margins at home, Chinese refineries started to cut runs. In June and July, refinery runs in China fell to roughly 12.5 million barrels a day from more than 15 million barrels a day before the war, said the Oxford Institute for Energy Studies.
China has prepared for years for this moment, making energy security a national priority as early as 2014. Extensive government support of the renewable sector has reduced the country's reliance on oil to generate electricity.
In the first half of this year, about two-fifths of the country's total electricity generation came from renewables, according to official data. Half of the new cars sold in China this year are new-energy vehicles.
Cheap electric vehicles, a large charging network and a high-speed rail network spanning tens of thousands of miles meant that Chinese consumers could easily switch to other travel options when fuel gets expensive. And they did.
China also has tapped coal. While turning it into chemicals is more expensive than using oil or natural gas, China's domestic coal reserves are vast. By perfecting coal-to-chemical processing, it has protected the country against disruptions to oil supplies, said Helen Qiao, greater China economist at Bank of America.
Analysts and economists say China, which relied on imports for 70% of its crude oil supply before the war, can't keep imports this low forever. The longer that flows through Hormuz remain constrained, the more officials will have to balance economic growth with ensuring oil stockpiles don't fall too much. But they disagree on when China will start buying more crude, and how much.
And there are signs of pain. For instance, the sharp fall in high-margin businesses such as diesel and gasoline exports is hurting Chinese refineries, as well as the country's manufacturing and export machines more broadly.” [1]
1. Xi Turns Oil into Shield Against West --- China's vast reserves protect its economy as the war in Iran rattles global order. Feng, Rebecca; Spegele, Brian. Wall Street Journal, Eastern edition; New York, N.Y.. 29 Aug 2026: A8.
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