With rising tensions in the Middle East sending oil prices to levels not seen in years, concerns have centered on the Strait of Hormuz, a key route for China’s imported crude. Despite regional disruptions impacting energy markets, China has demonstrated resilience, backed by a comprehensive strategy for energy security.
China holds an extensive oil reserve estimated at 1.397 billion barrels, combining both government and commercial storage. This inventory is capable of covering the loss of imports via the Strait of Hormuz for around seven months. Over recent years, Beijing has built up this buffer by acquiring discounted oil from countries under sanctions, including Iran and Russia. As of early 2026, these reserves represent about 120 days’ worth of overall crude imports and afford China a period of approximately four months to manage a full supply interruption diplomatically or economically.
Beyond amassing oil, China has enacted measures to stabilize domestic energy costs. The National Development and Reform Commission recently intervened by limiting fuel price increases, absorbing more than Yuan 1,000 per metric ton of the recent global surge. This approach halved the anticipated rise for consumers, cutting the planned price hike by close to Yuan 0.85 per litre. While this policy reduces profits for refiners, it supports broader economic stability, coinciding with a return to positive factory-gate prices.
China is also reducing its reliance on oil through rapid adoption of electric vehicles. The country’s EV fleet now matches the combined total of the rest of the world, with half of new cars sold last year being electric. Oil use displaced by EVs in 2023 was equivalent to all of China’s Saudi imports, marking a peak in national fuel demand and lowering reliance on seaborne crude.
On the diplomatic front, the government has called for regional peace through a set of proposals while maintaining a non-military stance. President Xi Jinping has engaged in efforts to promote a ceasefire, using China’s position as the largest importer of Iranian oil to advocate for easing blockades. This focus on building oil reserves has allowed China to reduce risks associated with Middle Eastern supply, altering its exposure to global energy market turmoil.
