China's Energy Stockpile Shields it from Global Price Spikes

China's vast energy stockpile may shield it from price spikes in crude oil and natural gas, making it an unlikely victim of the conflict between Israel and the United States against Iran. According to Russell, China is the world's largest energy importer but has a significant surplus of crude, which can be used as a buffer against price shocks.

The country's refiners could also reap windfall profits by ramping up exports of refined products if Asia's export-oriented refineries in countries such as India and Singapore start to run low on crude supplies. China's ability to refine stockpiled crude and export diesel and gasoline would give it a competitive advantage in the global market.

Additionally, China has other advantages in the energy sector. It is the major buyer of sanctioned but discounted Russian crude and also the destination for any Iranian crude at sea that managed to exit the Strait of Hormuz before the weekend attacks by Israel and the United States.

China's surplus crude was estimated to be 1.13 million barrels per day in 2025, with strong builds towards the end of the year as imports rose sharply to a record high of 13.18 million bpd in December. The country may cut imports by May and June to mitigate some of the impact of the sharp rise in prices.

China's advantage extends beyond crude oil to both coal and liquefied natural gas (LNG). The world's biggest importer of LNG, China has shown in past episodes of high prices it will cut spot purchases and only take long-term cargoes, which tend to be either on fixed or oil-linked prices. This would allow Chinese utilities to boost profits.