In September, China imported 570,000 barrels of crude oil each day more than needed. This amount was less than in August when imports exceeded needs by 1 million barrels daily. China’s extra purchases have helped reduce the oversupply in the global oil market. However, it remains unclear how long these purchases will continue or if they will be enough to solve the rising surplus problem.

Impact of China’s Purchases

If China’s purchases decrease or aren’t significant enough, crude oil prices could drop further. This situation highlights the risk of prices falling if demand doesn’t keep up with the increasing supply. The FXStreet Insights Team collects observations from market experts and adds their own analysis. This creates a well-rounded view of the market. Recent data shows that China’s ability to absorb excess oil is declining. In September 2025, they absorbed 570,000 barrels per day, down sharply from 1 million barrels per day in August 2025. This decline suggests a weakening support for crude oil prices. Further details indicate that the situation is getting worse. In the first two weeks of October 2025, crude shipments to China decreased by 8% compared to September. Satellite images reveal that China’s storage facilities are now nearly full at 95% capacity.

Risk to Oil Prices

This situation poses a serious risk to oil prices, which are already weakening. Since early October 2025, WTI crude futures prices have dropped from over $78 to around $74 per barrel this week. Without China’s buying support, the market faces a larger oversupply. For traders, this is a time to consider strategies that could profit from falling prices or increased volatility. We are looking at buying put options on WTI or Brent futures contracts expiring in the next one to three months. This positions us for a potential price drop to the low $70s or even the high $60s due to oversupply. We’ve seen this pattern before, especially during the 2014-2016 period when a global excess led to a major price crash. While OPEC+ maintains production limits, any reluctance to comply could quickly worsen the price situation. The focus has now shifted from China’s demand to the discipline of oil producers worldwide. Create your live VT Markets account and start trading now.

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