RoydadNaft –  The long-held belief in oil markets that producers, particularly OPEC+, control prices through output adjustments has been upended in 2025 by China. As the world’s top crude importer, Beijing has wielded its buying power to establish an effective price floor and ceiling simply by ramping up or scaling back the amount of oil it channels into storage.

OPEC+’s production cuts in 2022 did bolster prices, but those gains eroded once the group began unwinding them in April 2025. Now, facing an impending global surplus, OPEC+ has opted to maintain steady output through the first quarter of next year—leaving China to soak up the excess supply.

What China does in 2026 has become the biggest wildcard in oil markets, with other players likely to tailor their strategies around Beijing’s moves.

China provides no official data on its strategic or commercial stockpiles, making it difficult to track physical flows or predict policy direction. However, 2025 made one thing clear: Chinese buyers purchased far more crude than needed for domestic refining and fuel exports.

By subtracting refinery throughput from total available crude (imports plus domestic production), analysts can estimate surplus volumes heading into storage—though some may have gone to unreported “teapot” refineries.

For the first 11 months of 2025, this surplus averaged around 980,000 barrels per day (bpd), with total available crude at 15.80 million bpd against refinery runs of 14.82 million bpd.

The buildup began in March after a rare inventory draw in January-February. A strong correlation emerged between surplus volumes and oil prices: China loaded up on barrels during dips and eased off when prices climbed.

This pattern was evident in September, when the surplus fell to 570,000 bpd from 1.10 million bpd in August—reflecting purchases arranged amid elevated prices during the June Israel-Iran tensions, when Brent spiked to a six-month high of $81.40.

As prices softened afterward, buying resumed, pushing the November surplus to 1.88 million bpd—the highest since April and up sharply from 690,000 bpd in October.

Can China keep absorbing the glut?

China’s storage activity largely explains why Brent crude stayed range-bound in the second half of 2025, hovering around $65 a barrel.

The critical question for 2026 is whether China can—and will—continue buying excess crude during price drops, effectively providing a floor.

Estimates of China’s current stockpiles range from 1 billion to 1.4 billion barrels. At base import levels of about 11 million bpd, 90 days of cover would require roughly 1 billion barrels. With commercial inventories likely around 700 million barrels, the strategic reserve may stand near 500 million—suggesting room for another 500 million barrels if Beijing targets full coverage.

New storage capacity is coming online, with state giants like Sinopec and CNOOC adding at least 169 million barrels across 11 sites in 2025 and 2026.

A sustained inflow of 500,000–600,000 bpd would add about 200 million barrels annually. At that pace, China could absorb much of the projected 2026 global surplus, supporting a price floor while also capping upside by trimming imports if prices surge.

There are plenty of uncertainties, but recent trends point to continued inventory building through 2026 and likely into 2027.

What stands out is China’s willingness to use storage flows as a deliberate pricing tool.

With China’s seaborne imports of around 10 million bpd representing roughly a quarter of global seaborne trade, Beijing’s policies may now be the single most important driver in oil markets.