July 04, 2024 [Reuters]- China has asked its state oil companies to add 8 million metric tons, or nearly 60 million barrels, of crude oil to the country’s emergency stockpiles to boost supply security, according to analytics firm Vortexa and trading sources.
The stockpiling, if completed, would be one of China’s largest in recent years and lend support to global oil prices that are already hovering near two-month highs amid the northern hemisphere summer travel season.
The stockpiling programme runs from July through March next year, and the total volume would equate to four days of national refinery processing and roughly 220,000 barrels per day based on Reuters’ calculations.
China currently imports roughly 11 million barrels of crude per day.
Five state oil firms – CNPC, Sinopec, CNOOC, Sinochem and Zhenhua Oil – have been tasked with the stockpiling, the sources said on condition of anonymity as the matter is not public.
China’s National Food and Strategic Reserves Administration did not immediately respond to a request for comment.
CNPC declined comment, CNOOC did not immediately comment and the other three companies did not respond to requests for comment.
China tightly guards information on its emergency government stockpile, making it hard to gauge or track its inventory levels.
Vortexa estimates China’s strategic petroleum reserve (SPR) levels at 290 million barrels.
By comparison, the U.S. Strategic Petroleum Reserve stands at 372 million barrels as of late June, according to the U.S. Energy Information Administration.
After opening its first reserve site in east China in 2006, China now operates at least a dozen SPR bases, mostly along the eastern and southern coast, including some in underground caverns. The government also rents commercial sites for its stockpile.
A new tank farm owned by CNOOC in Shandong province, China’s refining hub, is among reserve bases that will receive the new round of stockpiling, the sources added.
CNOOC, one of the country’s largest importers of Russian oil, pumped over 10 million barrels of Russia’s ESPO blend into its 31.5 million-barrel Shandong reserve site at Dongying city, Reuters reported in April.
Separately, Zhenhua Oil is building a 3 billion yuan ($412.46 million) reserve site with a capacity for 17.6 million barrels of oil in Weifang in Shandong province that is slated for completion by end of this year, the provincial government-run Dazhong Daily reported this week.
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