China Authorizes State Refiners to Tap Commercial Oil Reserves as Middle East Conflict Strains Global Supplies

China authorizes state-owned refiners to use commercial oil inventories to stabilize domestic supply as the Middle East war triggers a global energy crunch.

By: AXL Media

Published: Apr 10, 2026, 4:29 AM EDT

Source: Information for this report was sourced from The Straits Times

Mitigating Supply Volatility Through Commercial Inventory Release

In response to the deepening global energy crisis triggered by ongoing conflict in the Middle East, Beijing has authorized its major state-run refiners to begin drawing from commercial oil stockpiles. According to sources familiar with the decision, entities such as Sinopec and China National Petroleum Corporation (CNPC) have been given the green light to utilize inventories held at processing plants and storage facilities. This move is designed to provide a buffer against the supply disruptions currently upending international trade routes, ensuring that the world’s largest oil importer can maintain its industrial output despite the volatility in the Persian Gulf.

Quantifying the Projected Drawdown and Import Reliance

While the government has not publicly disclosed the exact volume of the release, industry experts suggest a significant shift in inventory management. According to analysts at Energy Aspects, China could facilitate the use of approximately 1 million barrels per day (bpd) through June 2026. Complementing this, consultancy FGE NexantECA estimated that the drawdown in commercial and operational stockpiles could reach 1 million bpd within the month of April alone. Given that China typically imports crude at a pace of 11 million bpd, these internal releases serve as a vital supplement to keep the nation’s refinery system operational without increasing immediate demand on a strained global market.

A Multi-Tiered Stockpiling Strategy for National Security

The decision to tap commercial reserves highlights China's sophisticated and multi-layered approach to energy security. These commercial volumes are distinct from the nation’s Strategic Petroleum Reserve (SPR), which authorities have notably kept untouched during the current crisis. According to geospatial analytics from Kayrros, China’s above-ground commercial inventories were estimated at 851 million barrels as of March, while the SPR held roughly 413 million barrels. By accessing the commercial tier first, Beijing preserves its emergency "last resort" resources while still addressing the immediate logistical challenges posed by the six-week-old war.