China's Massive Daily Oil Stockpile: A Crypto Perspective

• China's Strategic Advantage of Lower Crude Oil Prices
• China's Gain from BRICS Counterpart Russia
• China's Global Crude Oil Purchases
• China's Daily Oil Purchase: 1.39 Million Barrels
• A Look at China's Oil Accumulation for 2023
• China's Potential Profitability from Oil Demand Spike

China's Strategic Advantage of Lower Crude Oil Prices

China, a BRICS member country, has been capitalising on the slump in crude oil prices by accumulating up to 1.39 million barrels each day. The Asian giant has been benefitting from the affordable crude oil from Russia which it has been forced to sell at reduced prices due to sanctions. For China, the sanctions have turned out to be a favourable circumstance, as it has been able to amass crude oil since October 2023.

China's Gain from BRICS Counterpart Russia

China's financial benefit from this situation extends beyond just oil stockpiling. The nations have opted to conduct their oil transactions in local currencies, further strengthening the Chinese Yuan. This move resulted in the Yuan becoming the most traded currency in Russia for trade. In December of the previous year, China significantly stepped up its oil purchases, building up a reserve equivalent to six months. Despite not disclosing its strategic reserves to the public, China's accumulating behaviour has analysts speculating on the country's crude oil hoarding practices.

China's Global Crude Oil Purchases

But China's oil purchases are not strictly confined to Russia. China has been buying cheaper crude oil from various developing nations globally.

China's Daily Oil Purchase: 1.39 Million Barrels

In December 2023, reports revealed that China had accumulated an impressive 1.39 million barrels of crude oil daily. This was a steep increase from November, during which it had purchased 20,000 barrels per day. Chinese refiners maintained an aggressive buying strategy even when oil prices dipped the previous year. However, when crude oil prices peaked at $95 per barrel in September, China refrained from amassing more.

A Look at China's Oil Accumulation for 2023

Based on estimations, China has procured approximately 760,000 barrels of crude oil each day throughout 2023. As one oil trader pointed out to Reuters, China sources oil across the globe, excluding the U.S, primarily due to high freight rates.

China's Potential Profitability from Oil Demand Spike

When oil prices surge due to high demand, China could potentially sell them to other nations, making billions in profits. The high oil demand, expected around mid-2024, offers an opportunity for considerable profitability for China. Additionally, BRICS members could potentially enforce the acceptance of oil payments in the Chinese Yuan, further weakening the U.S. dollar's dominance.

Edited by Jonathan Stoker