China’s crude oil imports collapsed to an estimated 6.78 million barrels per day in May, the lowest monthly figure in nearly a decade, according to data from commodity analytics firm Kpler. The 20% year-on-year drop signals that Chinese refiners are drawing down the world’s largest strategic oil buffer to avoid paying war-inflated prices. That buffer is not infinite.
The import figure, reported by Kpler senior crude oil analyst Muyu Xu, marks a sharp decline from April’s 8.5 million barrels daily. It is a collapse from the 2025 average of 10.66 million barrels per day. The math does not add up.
Refinery run rates tell the story. Chinese refiners are processing 13.5 million barrels daily, Xu noted. That is down only 154,000 barrels per day from April.
The gap between what refineries consume and what China imports is being bridged by storage. About a million barrels per day of last year’s imports went directly into tanks. Those tanks are now being drained.
Here is what they are not telling you. The inventory drawdown cannot last. Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations, told CNBC in March that China’s stored crude—estimated at 1.2 to 1.3 billion barrels—could cover roughly four months of demand.
Four months. The Middle East war began in earnest months ago. time is short. Kpler’s Xu warned that some independent refiners, known as teapots, have only enough crude to operate until early June.
These smaller plants, concentrated in Shandong province, lack the state backing to absorb sustained high prices. They will cut run rates further. That frees up supply for state-owned giants like Sinopec and PetroChina.
But even the state majors face a shrinking supplier list. Follow the leverage, not the rhetoric. China’s buying options are narrowing fast.
A retaliatory 22.5% tariff blocks U.S. crude purchases. Venezuelan oil is restricted. The U.S. waiver on Russian crude—issued to cap prices—only covers barrels loaded before April 17.
Kpler’s Xu noted that waiver expires around mid-June. Indian refiners are competing fiercely for the remaining eligible Russian barrels. China is being squeezed from multiple directions.
Reuters energy columnist Clyde Russell reported that despite a 20% annual import drop in April, Chinese buyers still set aside an estimated 430,000 barrels daily for storage. Vortexa pegged the figure even higher at 580,000 barrels per day. Beijing is trying to maintain a cushion.
The effort is becoming unsustainable. Prices are the mechanism forcing this drawdown. Brent crude has whipsawed on ceasefire rumors but remains far above pre-war levels.
The Kansas City Federal Reserve president warned recently that the oil price shock might not be transitory. If sustained, it forces every importing nation to make a choice: pay up or draw down. China chose to draw down.
The strategy worked temporarily. It insulated Chinese consumers from the worst of the price surge. It also removed a major buyer from international spot markets, theoretically easing pressure on global prices.
That dynamic is about to reverse. The International Energy Agency has identified July and August as the “red zone” for oil supply. IEA Secretary-General Fatih Birol used that exact phrase.
The worst of the Middle East crisis—involving the U.S., Israel, and Iran—is expected to hit global supply just as Chinese buyers return to the market. A supermajor, unnamed in the OilPrice report but cited as warning of a potential spike to $160 per barrel within weeks, underscores the stakes. Other analysts quoted by OilPrice suggest oil could stay above $100 per barrel for years.
These are not fringe forecasts. They reflect a market where supply destruction is colliding with resilient demand. China’s demand is notoriously stubborn.
Despite some demand destruction from high prices, the country remains the world’s largest oil importer. Beijing has spent two decades reducing its dependence on maritime oil flows, Doshi told CNBC. Pipelines from Russia and Central Asia help.
Overland routes from Myanmar provide a trickle. But the vast majority of China’s crude arrives by tanker through the Strait of Malacca—a chokepoint that looks increasingly vulnerable. The strategic logic is clear.
Beijing will not let its oil inventories fall to dangerously low levels. The government has invested too much political capital in energy security. The 1.2-billion-barrel stockpile was built precisely for moments like this.
But a stockpile only works if you stop drawing it down before it runs out. That moment is approaching. Kpler’s data suggests Chinese imports must rebound.
When they do, the buying will hit a market already starved of supply. Iranian barrels, once a mainstay of Chinese independent refiners, are disrupted by the conflict. Russian barrels are contested. is releasing crude from its Strategic Petroleum Reserve—a move that briefly boosted exports to all-time highs, per OilPrice.
But SPR releases are finite. Geopolitics compounds the supply picture. Iraq’s oil sector faces collapse, sparking a race for new export routes. scored a rare earth win with a Greenland deposit deal, but that does nothing for crude supply.
These are not isolated events. They form a pattern of global resource competition intensifying under wartime pressure. Why It Matters: China’s return to the spot market will remove the single largest bearish factor currently capping oil prices.
When the world’s biggest importer stops drawing inventories and starts buying again, the price floor rises. Every driver, airline, and manufacturer on earth pays the consequences. The timing—coinciding with the IEA’s “red zone” for Middle East supply—could produce the most severe oil price spike since the 1970s.
Key takeaways: - China’s May crude imports hit a decade low of 6.78 million bpd, down from 10.66 million bpd in 2025, as refiners drain strategic stockpiles to avoid war-inflated prices. - The inventory buffer of 1.2-1.3 billion barrels is finite; independent refiners may exhaust their supply by early June, forcing a return to international markets. - The IEA warns July-August is the “red zone” for oil supply, precisely when Chinese buying is expected to resume, setting up a potential price shock. - Sanctions, tariffs, and competition from India are narrowing China’s supplier options, concentrating pressure on remaining Russian and Middle Eastern barrels. The next six weeks are critical. Watch Chinese import data for June, due in early July.
A rebound above 8 million barrels per day would signal the drawdown is ending. Watch Brent crude’s reaction to any Chinese buying tender. waiver on Russian crude in mid-June. Watch whether teapot refiners in Shandong cut runs further or shut down entirely.
Each of these signals will tell you whether the world is heading for an oil price crisis that central banks cannot ignore. The Kansas City Fed already sees the risk. The markets have not yet priced it in.
Key Takeaways
— - China's May crude imports hit a decade low of 6.78 million bpd, down from 10.66 million bpd in 2025, as refiners drain strategic stockpiles to avoid war-inflated prices.
— - The inventory buffer of 1.2-1.3 billion barrels is finite; independent refiners may exhaust their supply by early June, forcing a return to international markets.
— - The IEA warns July-August is the 'red zone' for oil supply, precisely when Chinese buying is expected to resume, setting up a potential price shock.
— - Sanctions, tariffs, and competition from India are narrowing China's supplier options, concentrating pressure on remaining Russian and Middle Eastern barrels.
Source: OilPrice
