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China is now the world's greatest oil power
21–30 of 38 posts
Re: China is now the world's greatest oil power
#22Earlier quoted context omitted.
It might be said that this article casts China as a "super capacitor" in that it can store and release massive quantities of oil at will. It also has its own domestic oil production of 4.3 million barrels per day.
Yes and they seem good at this, too. News reports are that they started stockpiling in January at the latest in prevision of a conflict in Iran that did start right at the end of February.
They started stockpiling in 2024. The estimate is that they had 1.4 billion barrels by the time the Iran war started, and they're down to 1.2 billion now. (Nobody knows for sure, though.) Meanwhile the US has 304 million barrels left in our reserves, but there's a (disputed) operational minimum around 225 million, where draw slows down and the caverns start to suffer damage. (That's about 90 days at current draw rates. Also, this is a loan program, where oil needs to be "repaid" with interest starting in November, so that's going to affect prices too.)
Re: China is now the world's greatest oil power
#23Isn't that pretty misleading? About the production that can be cranked up / lowered as per needs, so the US likely remains the biggest oil power.
Not even close. 1) US has at least 4x lower oil reserves than China so it can't outlast China in a game of energy chicken, 2) US produces mostly light crude while almost all its refineries are for heavy crude so it can't even use the stuff it makes, 3) China has the ability to control its own industries like flipping a switch so they can halt oil-demanding (and refining) immediately to control 15% of the world's dema…
In researching this question, 40% of the refineries in the U.S. can process light crude efficiently.
They all can refine it, but the more technically adept refineries that specialize in processing heavy, sulfur-soured crude do not run efficiently with lighter grades.
https://www.forbes.com/sites/rrapier/2026/04/05/debunking-a-...
Re: China is now the world's greatest oil power
#24Isn't that pretty misleading? About the production that can be cranked up / lowered as per needs, so the US likely remains the biggest oil power.
It might be said that this article casts China as a "super capacitor" in that it can store and release massive quantities of oil at will. It also has its own domestic oil production of 4.3 million barrels per day.
Is the crux of this article just that the Chinese oil reserve is 2x the capacity of the US oil reserve?
Is there anything more to it than that?
Re: China is now the world's greatest oil power
#25Earlier quoted context omitted.
It might be said that this article casts China as a "super capacitor" in that it can store and release massive quantities of oil at will. It also has its own domestic oil production of 4.3 million barrels per day.
Is the crux of this article just that the Chinese oil reserve is 2x the capacity of the US oil reserve? Is there anything more to it than that?
They were also able to drastically cut their own internal demand and external sales/shipments (the article mentions jet fuel to other Asian nations).
This was possible because their economic planning is centralized.
Re: China is now the world's greatest oil power
#26The most fascinating thing about this is how oil futures markets were able to capture this while the media was endlessly blasting stories about oil shortages. Anyone paying attention to oil prices since the start of the war has been confused about the total disconnect between oil future and the existential situation on the ground. Even the media seemed mystified by this. Well, now we all know the answer.
No, it's because oil is still transiting the strait. A select group of tankers has been bypassing the Iranian "blockade" and ferrying oil across for months now. > US Energy Secretary Chris Wright said Wednesday that the American military continues to escort barrels through Hormuz, and that about 13 million barrels a day are leaving the Gulf — half through the strait and half via bypass pipelines. US Central Command s…
That doesn't fully explain it, the amount of oil making it through the strait is a small fraction (less than 25%) of the amount that normally flows through there.
Re: China is now the world's greatest oil power
#27Isn't that pretty misleading? About the production that can be cranked up / lowered as per needs, so the US likely remains the biggest oil power.
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Re: China is now the world's greatest oil power
#28Reminder PRC refines MORE oil than US.
US produces more oil, but PRC massive SPR = PRC functionally a larger supplier by being able to release more, at drop of hat, than US aggregate supply lever [drilling + spr]. PRC simply storing a fuckload of oil - SPR seems enough to buffer large global disruption for months = PRC gains huge pricing power.
PRC electrifying only increases their oil swing buyer leverage - they are not going to let their billions in oil infra and built out SPR to the waste. Electrification frees up refinery surplus for export and additional price control as SPR buffer / time increases. If they can backstop regional disruptions i.e. 5-10mbd per day like in Iran for few month they're functionally a "producer" with +/- $50 USD per barrel vote.
Important to note this not temporary, this permanent leverage as long as PRC has world's largest oil refining capacity and largest SPR.
PRC also has electrification and domestic coal to petchem stack, i.e. if oil over $70, PRC gets permanent discount on industrial inputs. Right now PRC has 30% discount, using coal to do job of oil. This another drag producer power ability on top of PRC renewable wiping demand - renewable export supply lever. Ultimately upstream oil producers are not selling barrels to consumers, they're selling finished products (gasoline, diesel, jet fuel - energy), if PRC simply stores enough buffer, and have massive refining and have massive petchem, massive electrification to displace domestic demand, and massive renewable export - and it is important to recognize scale of all these categories in PRC are massive - then PRC actually has massive oil power leverage. Maybe even the greatest, because functionally they are the greatest supplier for everyday markets, including conflicts / disruptions that does not empty their SPR.
Re: China is now the world's greatest oil power
#29Earlier quoted context omitted.
Not even close. 1) US has at least 4x lower oil reserves than China so it can't outlast China in a game of energy chicken, 2) US produces mostly light crude while almost all its refineries are for heavy crude so it can't even use the stuff it makes, 3) China has the ability to control its own industries like flipping a switch so they can halt oil-demanding (and refining) immediately to control 15% of the world's dema…
very interesting! So US refineries that can handle heavy crude are unable to handle light crude?
It's not that they are unable to entirely, it's that they are unable to economically. If you're paying more to refine your oil than what it costs to sell/use it, you're taking money away from your industries that depend on oil. Eventually the businesses would go bankrupt. Since we have a "free market", the market doesn't want to lose money, so it will run at a shortage with high prices, or stop running entirely (whole refineries can shutter due to losses). We saw this in practice during the 70s when OPEC forced a shortage. We are still vulnerable to the same thing.
The same shortages seen in the 70's would have already happened this year due to the Straight of Hormuz - except China saved the whole world from shortages by cutting its own imports of oil by 50%. Their massive drawdown created a buffer in the world oil market that everyone else pulled from. This is why China's oil reserve and non-OPEC imports make them the most powerful country in the world now. They effectively exist in a separate oil system with plenty of capacity for themselves, while we remain reliant on OPEC.
Re: China is now the world's greatest oil power
#30Earlier quoted context omitted.
It might be said that this article casts China as a "super capacitor" in that it can store and release massive quantities of oil at will. It also has its own domestic oil production of 4.3 million barrels per day.
Is the crux of this article just that the Chinese oil reserve is 2x the capacity of the US oil reserve? Is there anything more to it than that?
4x. The crux is that they can flip a switch to change global oil supply, be highly resistant to embargos, and are no longer subject to OPEC (through Iran & Russian oil traded in Yuan). They can now change global oil prices at will and resist attacks on their energy imports.