BNPP-OIL GAS Chinas crude oil stockpiling：Signs of fade-20250926

Chinese crude oil stock building has held up price… but what have been the drivers?

Despite the backdrop of anaemic summer crude demand and growing supply (both OPEC and non-OPEC barrels), global oil prices have been resilient. Brent has traded within a $65-70/bbl range sincethe start of August. As to where this price support has come from… the answer not least is China!The market has been surprised by how large the country’s stock build has been, especially throughthe seasonally tighter months of summer. Its commercial crude stores have grown by ~500kb/d onaverage since March, peaking at ~900kb/d in 2Q25. We can only speculate as to China’s reasonings,but we expect it reflects (1) a hedge against heightened geopolitical risk (2) Brent trading below a$70/bbl through-cycle price (3) the availability of discounted, sanctioned barrels from Iran and Russiaand (4) defensively locking in these cheap volumes before any potential tightening of US sanctions.

Can the stock build continue? We think not for long!

With a total Chinese capacity of ~2bnboe (BNPPE analysis) we estimate storage is currently 68%full. Look back to Q3’20 – the height of Covid – and commercial storage peaked at a similar absolutelevel to that of today, not least as high import activity caused severe congestion at Chinese ports.This suggests moving beyond Q2’25 import levels is likely to prove increasingly challenging.