China’s Oil Stockpiling Plans Amid Market Dynamics
China intends to maintain its extensive stockpile of crude oil through next year. However, with excess food items expected in the market in the coming months, even the largest crude importers might struggle to keep oil prices stable at around $60 per barrel.
According to Darn Struben, who leads oil market research at Goldman Sachs, this year’s lower prices combined with China’s efforts to enhance its energy security will see the nation boosting its crude oil stocks by about 500,000 barrels per day over the next five quarters.
Frederic Lasserre from Gunvor, a leading commodity trading company, shares a similar perspective. He believes that China will continue to build its crude oil reserves, ensuring both strategic and commercial supplies are secured until 2026.
After a slow start to the year, China ramped up its crude oil imports from March to April, indicating that the primary motivation behind these increased levels is the accumulation of stocks rather than a significant spike in demand.
Unlike the U.S., China does not publicly disclose its inventory levels. Instead, analysts infer data from overall supply and refinery processing rates, estimating how much is processed into crude and fuel for strategic or commercial reserves.
China’s heightened purchasing activity has provided some support for crude oil prices, even in light of ongoing concerns about increasing OPEC+ production and fluctuating global oil demand, influenced by inconsistent U.S. trade policies and tariffs.
Goldman Sachs has a somewhat cautious outlook, anticipating oil prices could dip to around $50 per barrel next year. They predict an oversupply of about 1.8 million barrels per day by year-end.
The investment firm hopes that the global oil market will adjust once OPEC+ announces plans to continue its production increase in October, resulting in a forecasted surplus of 1.9 million barrels per day next year.
Additionally, Goldman Sachs anticipates next year’s oil prices will range between $53 and $56 per barrel, with an approximate overshoot of 2 million barrels per day. The risk associated with price forecasts for 2025-2026 remains balanced—though somewhat skewed—indicating potential for higher prices.
