&imwidth=800&imheight=600&format=webp&quality=medium "Global oil market could faces new crisis as China may increase imports, says reports")
US oil inventories and lower crude imports by China have helped ease pressure on the global oil market. However, supply condition could tighten if China ramps refinery activity and increasing domestic demand persist, then it may tighten supplies resulting in China to increases imports in the coming months, according to a report by ANZ.
The report noted that China's crude oil imports fell sharply following the closure of the Strait of Hormuz, dropping from roughly 12.5 million barrels per day (mb/d) to about 2.5 mb/d. This decline has resulted in cumulative savings of more than 60 million barrels compared with levels seen before the escalation.
"Assuming imports would have stayed at the levels they were at prior to late February's escalation of the Middle East conflict, the cumulative amount saved by China's reduced purchases is more than 60mbbl," the report said.
The development comes amid growing concerns over oil demand. The report also suggest that soft manufacturing activity due to increasing electric vehicle adoption, reduced domestic flights and constrained petrochemical feedstock imports from the Middle East have likely reduced the oil demand of China by around 1 mb/d over the past month or so.
"This has been exacerbated by a slowdown in refining activity, reflecting high crude premiums, elevated freight and insurance costs and issues over refining and inventory valuation losses. Even so, we don't expect this to be a long-term trend. A gradual rebound in mobility and feedstock flows improve things," the report said.
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China's relies on domestic oil stockpiles
The report also suggests that China has increasingly relied on its domestic oil stockpiles in recent months. It noted that the global market was able to absorb the additional OPEC supply in 2025, following the group's decision to reverse production cuts of 2.2 million barrels per day, largely because China took in much of the excess crude. China's oil inventories have expanded by an estimated 190 million barrels since the start of 2025, bringing total stockpiles to roughly 1.7 billion barrels.
The report further noted that China has mainly managed supply shortages by cutting refinery operating rates rather than significantly drawing down its strategic petroleum reserves. However, analysts warned that this strategy may not be sustainable over the long term. "Any shift in this dynamic will have major repercussions for the oil market. If China is reluctant to dip heavily into its strategic reserves, we should see imports rise in coming months, which could further tighten the physical market," the report said.
