November 18, 2025 [Reuters]- China’s flows of crude oil into storage likely lifted in October as robust imports and domestic output outweighed an increase in refinery processing.

China’s surplus of crude oil was about 690,000 barrels per day (bpd) in October, up from about 570,000 bpd in September, according to calculations based on official data.

The rate at which China has been adding to inventories is increasingly being seen as a key factor in crude oil demand in the world’s biggest importer, as well as adding a layer of uncertainty into price forecasts.

China’s refineries processed 14.94 million bpd in October, an increase of 6.4% from the same month last year, although down from the two-year high of 15.26 million bpd in September, according to data published on November 14 by the National Bureau of Statistics.

Crude imports were 11.39 million bpd in October while domestic production was 4.24 million bpd, giving a combined total of 15.63 million bpd of oil available to refiners.

Subtracting the refinery processing from the total crude available leaves 690,000 bpd that was available to be added to commercial or strategic storages.

China does not disclose the volumes of crude flowing into or out of its strategic and commercial stockpiles, but an estimate can be made by deducting the amount of oil processed from the total crude available from imports and domestic output.

It is worth noting that not all of the surplus crude was likely to have been added to storage, with some being processed in plants not captured by the official data.

But even allowing for those gaps, it is clear that from March onwards, China was importing crude at a far higher rate than necessary to meet domestic fuel demand.

For the first 10 months of the year, the surplus crude amounts to about 900,000 bpd, given that imports and domestic output combined are 15.65 million bpd, while refinery processing amounted to 14.75 million bpd.

The surplus has been built up since March and came after refiners made a rare draw on inventories in January and February, when processing rates exceeded available crude by about 30,000 bpd.

This was the first time since September 2023 that throughput exceeded the amount of crude from imports and domestic output.

PRICE IMPACT

The draw on inventories at the start of 2025 came amid rising oil prices, with benchmark Brent futures reaching their highest point so far this year of $82.63 a barrel on January 15, having risen steadily from levels around $70 in early December.

Since then crude prices have trended lower, with occasional spikes higher due to geopolitical tensions such as the brief conflict between Israel and Iran in June.

Brent ended at $64.20 a barrel on Monday, the mid-point of the $60-$70 range that has persisted since the start of August.

While China’s refiners and the authorities in Beijing don’t talk publicly about their strategies for building inventories, it’s clear that they tend to import more crude when they deem prices to be reasonable, and pull back when prices rise too high or too rapidly.

This was in evidence in September, when the surplus crude dropped to 570,000 bpd after hitting 1.10 million bpd in August.

Cargoes arriving in September would largely have been arranged at the time of the Israel-Iran conflict, when crude prices were elevated, with Brent spiking to a six-month high of $81.40 a barrel on June 23.

With prices having eased since June, China’s refiners have resumed buying excess crude.

In effect, China’s storage flows act as a floor and ceiling for the crude oil price, meaning that it’s likely that China will absorb any global surplus that may eventuate as OPEC+ lifts output targets.

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The views expressed here are those of the author, a columnist for Reuters.