China's energy regulator wants PetroChina, Sinopec and CNOOC to drill more as Iranian crude disappears from the market. Beijing has leaned on its stockpiles during the Iran war, but those reserves are finite.
China's National Energy Administration has called on PetroChina, Sinopec, CNOOC, and other domestic producers to expand production capacity, increase investment, and accelerate the development of national oil and gas supply bases. The directive, issued after an October 21 meeting, calls for steady growth in crude oil production and rapid growth in natural gas output.
Stockpiles have cushioned China so far
China has managed the crisis better than most major importers because it stored large volumes of crude when prices were favorable. When the Iran war began in February, it held an estimated 1.3 billion to 1.4 billion barrels in commercial and strategic inventories. Refiners cut imports when Brent surged above $100 per barrel, and June crude imports fell by an estimated 4.4 million barrels per day compared with the 2025 average.
But the stockpiles are finite. In September, Chinese refiners processed approximately 13.99 million bpd, with domestic production supplying 4.43 million bpd and imports 9.03 million bpd. Analysts estimate withdrawals from storage covered the 530,000 bpd shortfall. Onshore stocks stood at approximately 1.192 billion barrels in the week ending October 19, down 162 million barrels from an early May record.
Iranian barrels run out
Iranian crude kept reaching Chinese buyers from offshore storage even after Washington imposed its naval blockade, but those exports have reportedly dried up. Kpler estimates that Iran's floating inventories available for delivery to China fell below 1 million barrels by October 5 and were subsequently exhausted. Chinese refiners now face replacing them with more expensive alternatives, often at extraordinarily high freight rates.
Beijing is also looking to Russia. On October 21, China and Russia agreed to support companies seeking to expand oil cooperation, according to Chinese state media, though the announcement contained no specific new supply commitments.
Domestic output faces limits
China produced approximately 216 million metric tons of crude in 2025, a record. Even so, it imported more than twice as much crude as it produced in September. The latest strategy emphasizes deepwater exploration, deep underground formations, unconventional resources, and extra output from mature oilfields.
Near-term buying still tracks international prices. FGE NexantECA and Energy Aspects have cut their fourth-quarter Chinese import forecasts to approximately 9.2 million to 9.3 million bpd as prices climb again.
Source: Oilprice.com
Trading involves risk.
Risk Disclaimer
