China has begun drawing down its strategic petroleum reserve, according to US Energy Secretary Chris Wright. The move comes as global energy supplies face disruption from US-Israeli strikes on Iran and broader Middle Eastern instability.
What China is doing and why it matters
China’s strategic oil inventories stood at nearly 1.4 billion barrels as of December 2025, with roughly 360 million barrels held directly by the government. Throughout 2025, China was adding an average of 1.1 million barrels per day to its strategic inventories, according to EIA data.
In April 2026, China authorized state-owned refiners including Sinopec and CNPC to draw from commercial reserves in response to the Iran conflict. Wright’s announcement, which came around May 15, confirmed that the drawdown had expanded beyond just commercial stocks to include strategic reserves.
The immediate catalyst is straightforward. US-Israeli military action against Iran has disrupted Middle Eastern oil flows, and China, as the world’s largest crude importer, is particularly exposed to those disruptions. A significant portion of China’s oil imports historically flow through the Strait of Hormuz, making any conflict involving Iran a direct threat to Beijing’s energy security.
