When Xi Jinping secured an unprecedented third five-year term as China’s leader in late 2022, he issued stark warnings to senior officials about the “stormy seas” and “worst-case scenarios” that could confront a nation of 1.4 billion people. These cautionary words were not empty rhetoric. Over the following months, Beijing embarked on a major state-led campaign to stockpile oil, gas, food, and other strategic commodities, positioning China among the world’s most heavily prepared countries for global supply disruptions.
Now, the war in Iran, triggered by US and Israeli strikes, has closed off a critical artery for Middle Eastern trade—the Strait of Hormuz—putting these reserves to their first serious test. Analysts say the crisis demonstrates both the scale of China’s foresight and the opacity that surrounds the nation’s resource security policies. “Party leadership is obsessed with ‘grey rhino’ crises, exactly like what we’re looking at,” said Even Pay, director at strategic advisory group Trivium China. “Food and energy security isn’t just a routine talking point for leaders — China’s government spends a huge amount of fiscal resources on crisis preparedness and economic security.”
The exact size of China’s reserves remains a tightly guarded secret, with estimates varying widely based on budget documents, trade figures, and satellite observations. Most experts agree that the country’s oil reserves, encompassing the official strategic petroleum reserve and commercial stockpiles, now range from 1.1 billion to 1.4 billion barrels. Bernstein Research estimates that the upper end of 1.4 billion barrels could cover 112 days of imports, while research house Gavekal suggests reserves might exceed 2 billion barrels. Customs data further indicates that crude imports surged by 16 percent in the first two months of this year, a jump that far outpaces domestic demand and points to continued accumulation rather than immediate consumption.
China’s Ministry of Finance has also committed substantial resources to stockpiling. In 2026, it budgeted Rmb110.68 billion ($16 billion) for resource reserves, an 8.1 percent increase over the previous year. State-owned enterprises, instructed by the National Development and Reform Commission, shoulder much of the acquisition and storage work, which adds layers of complexity and secrecy to an already opaque system. This approach reflects Xi’s 2023 directive to accelerate reserve-building to safeguard national security, with officials emphasizing preparedness for unexpected crises.
The ongoing Iran war underscores China’s vulnerability as well as its strategic resilience. About one-third of its oil and a quarter of its gas imports traverse the Strait of Hormuz, where shipping has largely ground to a halt. Despite the disruption, experts believe Beijing is unlikely to release reserves solely to counter short-term price swings, as has been done in the United States. Dai Jiaquan, chief economist at the Economics & Technology Research Institute of state oil giant CNPC, told the Financial Times that strategic reserves would primarily be deployed to address supply interruptions rather than market fluctuations, noting that China already exceeds the International Energy Agency’s 90-day import cover standard.
Even so, some factors could influence reserve usage. Cao Jianjun, chief expert at Sinopec’s internal think-tank, said that both the duration of the war and sustained price increases might prompt coordinated action among the so-called “Big Three” state energy companies: Sinopec, CNPC, and Cnooc. Traders and analysts, however, caution that the exact volume of stockpiles remains uncertain. One anonymous Chinese oil and gas trader noted, “No one really knows” the full extent of China’s reserves, and doubts persist over whether strategic oil would ever be tapped purely for price stabilization.
Comparisons with other nations highlight China’s robust preparation. Prior to the Iran strikes, the US strategic reserve stood at 415 million barrels, roughly 58 percent of capacity, less than half of conservative estimates of China’s stocks. The US has since announced plans to release 172 million barrels to curb rising prices, underscoring the contrast in scale and scope of national preparedness.
The conflict has also brought attention to other key commodities. China imports around 40 percent of its sulphur from the Gulf, crucial for fertilizers, lithium batteries, and semiconductors, much of which passes through the Strait of Hormuz. Methanol, a chemical input essential to plastics, pharmaceuticals, and textiles, is heavily dependent on Iranian supply. While these vulnerabilities exist, experts like Pay argue that China’s extensive reserves offer comparative insulation. “Over and over again this strategy has been vindicated, at least from Beijing’s perspective,” she said, noting that decades of stockpiling have cushioned the economy from similar shocks.
Regional disparities remain. Michal Meidan of the Oxford Institute for Energy Studies noted that while national-level disruptions can be smoothed, certain provinces and energy sectors will feel more acute effects, with fuel shortages and price hikes potentially impacting local economies. The recent rush of drivers in Nanjing to refuel ahead of a midnight petrol price rise illustrated how local disruptions can ripple quickly, even when national reserves are adequate.
China’s response is multifaceted. Beyond stockpiling, the country has invested heavily in renewable energy, electrified transportation, and domestic oil and gas production. At the same time, Beijing is exploring alternative supply lines, including overland oil trade through fellow members of the Shanghai Cooperation Organisation, spanning Central Asia, Russia, and Iran. Cui Shoujun, professor at Renmin University’s School of International Studies, emphasized that while strategic reserves remain the “foundation of energy security and the lifeline of the national economy,” extreme disruptions could prompt coordinated international logistics to maintain supply.
As the Iran conflict continues, the world is watching how Beijing’s resource strategies withstand one of the first serious tests since Xi Jinping’s directive to prepare for “stormy seas.” While much of the strategy remains opaque, the sheer scale of reserves, the fiscal commitment to stockpiling, and the focus on crisis-readiness suggest that China is determined to hedge against a world increasingly defined by uncertainty. Whether these measures will fully shield the country from prolonged disruptions or force difficult policy choices in the coming months is a question both analysts and global markets are now watching closely.
