China's Oil Reserves Shield Economy from Iran War Disruptions

China's massive crude oil reserves have shielded it from disruptions caused by the Iran conflict, according to The Wall Street Journal. The country's strategic stockpiles total around 1 billion to 1.4 billion barrels of crude oil, which is roughly equivalent to 120 days' worth of imports.

Before the conflict began, China's crude reserves surpassed those of the United States by nearly 600 million barrels. Beijing has been actively building up its reserve capacity since 2024, adding an estimated 1 million to 1.2 million barrels per day to its stockpiles.

In response to the Iran war, China began tapping into its commercial inventories in early May. By mid-August, daily withdrawals averaged around 700,000 barrels, although its strategic reserves remained mostly untouched. The country has also imposed export limits on refined fuels, with gasoline shipments plummeting 93% year-on-year in the second quarter.

Renewable energy sources supplied about two-fifths of China's electricity in the first half of this year, which has helped reduce the country's reliance on imported oil. However, reduced refining activity is now affecting industrial performance, with the oil and petrochemical industry contributing to a slowdown in Chinese industrial output during the second quarter.