Nation's energy supply seen on steady track

As geopolitical tensions in the Middle East continue to roil international energy markets, China's petroleum sector has demonstrated remarkable resilience, maintaining a steady supply of oil and gas to power the world's second-largest economy.

China's energy resilience is anchored by a sophisticated, multilayered defense system, featuring a strategic crude oil reserve and an extensive network of overland pipelines, said industry experts.

This infrastructure, encompassing the China-Russia and China-Kazakhstan crude oil pipelines, serves as a critical continental safety net that bypasses vulnerable maritime chokepoints, effectively insulating the domestic market from external shocks and ensuring a steady, uninterrupted flow of resources, they said.

By integrating strategic diversification with immense reserve capacities and expanding land-based pipelines, China has forged a protective buffer, said Lu Ruquan, president of the China National Petroleum Corp Economics and Technology Research Institute.

This framework effectively insulates the domestic market from the volatility of seaborne supply chains and significant maritime crises, ensuring China's overall oil supply and import stability despite a prolonged blockade that undoubtedly roils global markets, Lu said.

Furthermore, China's efforts in stepping up domestic oil and gas output have been pivotal in maintaining supply stability, with State-owned enterprises accelerating the development of major gas fields and unconventional resources across the country.

China's annual crude oil production hit a historic high of 216 million metric tons in 2025, a growth that has translated into a strong start for 2026.

As of mid-March, domestic oilfields have maintained high-intensity operations, with offshore production in the Bohai Sea and deep-sea projects in the South China Sea providing critical increments to the national total.

China's crude oil production during the first two months of this year reached 35.73 million tons, up 1.9 percent year-on-year. Average daily production stood at 606,000 tons, said the National Bureau of Statistics.

Cao Jianjun, chief expert at think tank Sinopec Economics and Development Research Institute, said domestic crude oil production has maintained steady growth, with the annual increment in oil and gas equivalents surpassing 10 million tons for nine consecutive years.

While the nation's reliance on oil imports remains significant, the continuous growth of domestic supply serves as the bedrock insulating the country against external volatility, Cao said, adding that as uncertainty becomes the new normal, "we must counter external instabilities with our own internal certainty".

Guo Shengwei, deputy dean of the CNOOC Energy Economics Institute — a think tank affiliated with China National Offshore Oil Corp — said domestic refiners' crude oil stocks are resilient enough to resist short-term high price impacts.

Guo attributed this strength to long-term national strategic reserve arrangements, saying China currently possesses a stronger capacity to absorb these price shocks than some European countries, Japan or South Korea.

Beyond production, the nation's emergency readiness serves as a critical "safety valve".

As of mid-March, China's combined strategic and commercial crude oil reserves were capable of covering 110 to 140 days of net imports, said Reuters. This level significantly exceeds the international safety standard of 90 days.

This "energy firewall" ensures that even in the event of a total, temporary blockage of major shipping lanes, China's industrial base and public transport systems would continue to function without immediate interruptions.

Lu said that by leveraging this increased domestic production and enhanced storage capacity, China is well-positioned to meet the rising demand for clean energy while significantly reducing its dependence on sensitive international supply chains.

OCBC, a Singaporean banking and financial services group, said the Chinese economy is resilient amid the ongoing volatile market due to its declining structural dependence on oil.

This is supported by "the rapid penetration of electric vehicles, increased substitution through coal-to-chemicals feedstock and a power generation system that is largely insulated from oil price fluctuations", it said.