Oil tanks are seen at a Sinopec plant in Hefei, Anhui province, May 31, 2009. REUTERS/Jianan Yu
China’s massive buildup of crude oil reserves could soon send shockwaves through global energy markets. As explained by Forbes, the country’s rapid stockpiling of oil has masked what would otherwise appear to be a growing global glut. If Beijing decides to slow or stop these purchases, it could trigger a sharp decline in prices and force OPEC+ to intervene once again.
The International Energy Agency (IEA) has projected enormous supply surpluses, estimating that global oil inventories could expand by about 800 million barrels this year and 1.2 billion barrels next year. Yet, much of that excess oil has not appeared in reported data. This discrepancy has fueled debate over whether the IEA is misjudging demand or whether some inventories are simply being stored in regions with limited data visibility.
The key, according to the report, lies in China. Between April and August this year, Chinese government stockpiles reportedly grew by 110 million barrels, equivalent to about 700,000 barrels per day. The U.S. Energy Information Administration places that number even higher, near 900,000 barrels per day from January to August. These figures explain why the global surplus isn’t fully reflected in OECD data — China’s state-controlled reserves are absorbing a massive portion of the excess supply.
The implications are significant. If China’s buying spree continues, oil prices could remain stable despite high production. But should Beijing pause or reverse its purchases, the market could be flooded with unabsorbed barrels, potentially driving prices sharply downward. Analysts warn that such a move could recreate the conditions seen in earlier oil price crashes, forcing OPEC+ to cut output to maintain stability.
China’s motives for building its reserves remain uncertain. Officials may be hedging against possible supply disruptions tied to sanctions on Russia or other geopolitical risks. There is also speculation that Beijing fears future embargoes or trade restrictions, prompting it to secure energy independence while prices remain manageable. Unlike commercial stockpilers who adjust holdings based on market trends, government reserves are accumulated for strategic and political reasons — meaning purchases can continue steadily or stop abruptly.
Even if global demand is stronger than the IEA’s estimates, a surplus of about two million barrels per day is still likely in 2026. The danger, experts note, is not the surplus itself but how quickly it could become visible if China stops buying. A sudden end to Chinese stockpiling could unleash a wave of unabsorbed supply, sending oil prices tumbling and leaving OPEC+ scrambling to prevent another market collapse.