Oil & Energy
China's Oil Buying Strategy Expands Beyond Energy Security, Kpler Says
China has turned the timing of its crude purchases into a strategic geopolitical tool after years of building energy security buffers, Kpler said in a Wednesday note.The note said Beijing strengthened its energy security by accumulating strategic crude stocks and buying discounted oil from Iran, Russia and Venezuela, allowing it to avoid rushing back into the market during the Strait of Hormuz disruption.Kpler said China will eventually need to resume large-scale crude buying, but the timing may reflect diplomatic and geopolitical priorities as much as commercial demand.The note said renewed Chinese purchases could support Gulf producers while giving Beijing another opportunity to strengthen ties with Arab exporters and Iran, similar to its role in the 2023 Saudi-Iran rapprochement.China reduced refinery runs, relied on accumulated inventories and sharply cut crude imports instead of competing for tighter global supplies, Kpler said.Combined term and spot purchases have averaged about 6 million barrels per day since March, down from over 10 million b/d before the conflict.Although state-owned and independent refiners briefly returned to the spot market after oil prices retreated toward $70 per barrel in June, total purchases have remained well below pre-conflict levels, according to the note.Kpler said refinery throughput declined sharply, but imports fell even faster, suggesting Beijing deliberately replaced imports with inventories rather than responding to weaker domestic fuel demand.As the world's largest crude importer, China can influence global oil balances, price expectations and competition among producers by changing the timing of its purchases, although Beijing continues to provide little transparency into its energy strategy, Kpler said.Kpler added its days-cover framework estimates how long China's measured onshore inventories can sustain different combinations of refinery runs and crude imports, helping narrow the range of possible procurement outcomes.The note forecasts refinery throughput recovering from about 12.6 million b/d in July to roughly 14 million b/d by early 2027. If imports fail to recover alongside refinery runs, measured inventory cover could drop to below 300 days.Kpler said commercial activity by PetroChina, Sinopec, CNOOC, Sinochem and Zhenhua Oil often provides the earliest signals that China's procurement strategy is changing.The note highlighted Unipec's resale of several West African cargoes, near-zero Saudi crude nominations for four straight months and limited spot buying despite lower oil prices as signs of subdued purchasing activity.A sustained reversal in those buying patterns would likely offer one of the earliest commercial indications that Beijing is preparing to resume larger-scale crude purchases, Kpler said.China increasingly uses energy security to determine when to buy crude, allowing policymakers to align procurement with broader diplomatic, economic and geopolitical objectives instead of responding solely to market conditions.No single metric can identify when China will return to the market, but inventory levels, refinery runs and commercial purchasing patterns together provide the clearest framework for tracking changes in Beijing's crude procurement strategy, the note said.