China’s Record Oil Imports In December and throughout 2025, China set a new record for crude oil imports. This surge came from increased refinery activity and efforts to build reserves. In December alone, China imported 56 million tons, or about 13.2 million barrels per day. This amount is 17% more than last year and 6.4% higher than the previous month. For the entire year of 2025, imports reached a historic high of 579 million tons, averaging 11.6 million barrels per day. This was a 4.6% increase from the year before. China’s crude oil processing also rose by 4% in the first eleven months compared to the same period last year. We expect data on December’s processing rates soon. Moreover, China has been increasing its strategic reserves. In the first eleven months of 2025, the country imported about 46 million tons, or 1 million barrels per day, in addition to what its refineries processed. This stockpiling helped absorb last year’s oversupply and prevented a larger drop in oil prices. China’s record oil import of 13.2 million barrels per day in December 2025 supported oil prices significantly toward the end of the year. This demand took in a large part of the global oversupply and stopped prices from falling further. The key question now is whether this strong buying will continue into the first quarter of 2026. China’s Refinery Processing The purchases weren’t solely for storage; refinery processing in China also increased in 2025. Recent economic data shows that the Caixin Manufacturing PMI for December was at 50.8, signaling slight growth that may keep demand steady. This suggests a strong foundation that could sustain crude consumption in the near future. However, it’s important to note that a significant portion of the buying in 2025, around 1 million barrels per day, was specifically for building strategic reserves. Historically, when these stockpiling goals are met, the demand from this source can stop suddenly. A rapid end to reserve filling could quickly put pressure back on the market. This uncertainty in demand comes as OPEC+ maintains its production cuts, keeping WTI crude prices around $85 per barrel. The cartel’s discipline is currently stabilizing the market, but it could be challenged if China’s appetite for imports decreases. Traders should monitor China’s weekly import and inventory data very closely. With the risks of high demand against a potential drop in stockpiling, implied volatility in short-term crude options has increased. This situation suggests that strategies focused on price movement, rather than a clear direction, could be beneficial. The market is positioned for a significant change, and options for WTI and Brent delivery in February and March reflect this tension. Create your live VT Markets account and start trading now.

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