China's Unprecedented Oil Stockpiling Sparks Questions If Beijing Is Preparing For War

China's Unprecedented Oil Stockpiling Sparks Questions If Beijing Is Preparing For War

TYLER DURDEN

Almost four years ago we pointed out something striking: while the world was still busy recovering from the covid Pandemic and suffering under soaring inflation - as seemingly everything was suddenly in short supply and prices were soaring - China was busy stockpiling pretty much everything at an unprecedented pace. Quoting a JPM report from March 2022 we noted that  "while the world is short on commodities, China is not given they have started stockpiling commodities since 2019 and currently hold 80% of global copper inventories, 70% of corn, 51% of wheat, 46% of soybeans, 70% of crude oil, and over 20% of global aluminum inventories."

Almost as if China was preparing for its inevitable invasion of Taiwan.

But if anyone expected China to ease off the hoarding pedal after its massive stockpiling spree, they would be very disappointed and nowhere more so than oil. As John Kemp of JKemp Energy notes, China has been accumulating crude oil inventories to take advantage of relatively low prices and act as an emergency reserve in any future conflict with the United States and its allies.

China’s stocks of crude oil apparently increased by 54 million tonnes (about 400 million barrels or 1.1 million barrels per day) during 2025 after a similar increase in 2024. China’s massive inventory build-up has helped avert the accumulation of stocks in other areas and limited the fall in prices even as Saudi Arabia and its OPEC partners have boosted production.

Inventory accumulation, Kemp writes echoing what we said years ago, has also been described as a “strategic warning indicator” that could indicate the country’s leaders are preparing for a future conflict with the United States over Taiwan.

“Energy production and stockpile buildups often precede great power industrial wars,” one analyst told the U.S.-China Economic and Security Review Commission established by the U.S. Congress.

In building strategic reserves to enable its economy to keep functioning and armed forces to keep fighting during a future conflict, the country is following long-standing precedent. 

China, of course, is not alone: policymakers and military planners in the United States, Britain, France and other countries in Western Europe as well as Japan have all focused on building oil reserves in readiness for a conflict for almost a century. Yet nobody has taken stockpiling as religiously as Beijing has in recent years. 

The apparent increase in stocks during 2024 and again in 2025 is too large to be attributed to operational needs and commercial incentives alone.

The massive accumulation appears to be "a precautionary measure in case imports are disrupted by sanctions or an embargo during any future conflict with the United States and its allies," Kemp writes.

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