China is now the world's greatest oil power

https://www.economist.com/finance-and-economics/2026/08/09/china-is-now-the-worlds-great-oil-power

36•bookofjoe•2h ago

Comments

bookofjoe•2h ago

sgt•59m ago

Isn't that pretty misleading? About the production that can be cranked up / lowered as per needs, so the US likely remains the biggest oil power.

0xbadcafebee•51m ago

Not even close. 1) US has at least 4x lower oil reserves than China so it can't outlast China in a game of energy chicken, 2) US produces mostly light crude while almost all its refineries are for heavy crude so it can't even use the stuff it makes, 3) China has the ability to control its own industries like flipping a switch so they can halt oil-demanding (and refining) immediately to control 15% of the world's demand of oil which immediately impacts the entire world's price on oil, 4) they can get oil from Iran and Russia through the Yuan since everything you want is made in China so oil export controls don't work.

1234letshaveatw•33m ago

very interesting! So US refineries that can handle heavy crude are unable to handle light crude?

chasil•14m ago

In researching this question, 40% of the refineries in the U.S. can process light crude efficiently.

They all can refine it, but the more technically adept refineries that specialize in processing heavy, sulfur-soured crude do not run efficiently with lighter grades.

https://www.forbes.com/sites/rrapier/2026/04/05/debunking-a-...

bluSCALE4•43m ago

No, controlling supply isn't as important as controlling demand. If China wanted, we could all be paying 6, 8, 10 dollars a gallon right now causing real turmoil. Instead it's business as usual.

chasil•41m ago

It might be said that this article casts China as a "super capacitor" in that it can store and release massive quantities of oil at will.

It also has its own domestic oil production of 4.3 million barrels per day.

mytailorisrich•28m ago

Yes and they seem good at this, too. News reports are that they started stockpiling in January at the latest in prevision of a conflict in Iran that did start right at the end of February.

matthewdgreen•19m ago

They started stockpiling in 2024. The estimate is that they had 1.4 billion barrels by the time the Iran war started, and they're down to 1.2 billion now. (Nobody knows for sure, though.) Meanwhile the US has 304 million barrels left in our reserves, but there's a (disputed) operational minimum around 225 million, where draw slows down and the caverns start to suffer damage. (That's about 90 days at current draw rates. Also, this is a loan program, where oil needs to be "repaid" with interest starting in November, so that's going to affect prices too.)

jayd16•10m ago

Is the crux of this article just that the Chinese oil reserve is 2x the capacity of the US oil reserve?

Is there anything more to it than that?

matthewdgreen•25m ago

Oil producer != oil power. What matters is the ability for a government to routinely influence prices. The US government could, in theory, ban all exports or manually dictate production but we tend not to do that (yet). Our main government price-control lever comes from SPR releases, but we're nearly tapped out. China has no real legal restrictions on what its government can dictate except for what makes sense geopolitically, so at any moment it can make oil vastly cheaper or more expensive, even moreso than OPEC can by manipulating supply.

ApolloFortyNine•48m ago

China = clicks nowadays I guess?

The US produces more oil products than anyone else by a large margin [1] and extracts more than anyone else [2].

[1] https://www.eia.gov/tools/faqs/faq.php?id=709&t=6 [2] https://tradingeconomics.com/country-list/crude-oil-producti...

Gys•40m ago

> This ability to turn oil demand on and off, ostensibly at low economic cost, allows the world’s biggest oil importer to move prices just as the Organisation of the Petroleum Exporting Countries (opec) and its allies have long done through their control of half of global output.

This is not about production. You should read the article and not only the title.

1234letshaveatw•32m ago

does decreasing demand raise prices?

IAmBroom•29m ago

No, it lowers prices... which is what happened (effectively) versus expectations.

IAmBroom•29m ago

Yes, the US still outproduces China in oil by nearly a factor of three. The actual meaning of the vague title is that China temporarily buffered world crude prices.

TFA notes that China controlled prices during the Iran/"Orange Idiot" war in three ways: (1) they had fortunately filled their storage during a recent price drop, (2) they restricted exports of China oil, and (3) domestic use "sharply" decreased.

The article concludes that this 3-pronged approach is "manageable", but not sustainable:

> But the Iran war has shown that, in practice, China can singlehandedly stabilise the global oil market over a period of many months. Leaders of the increasingly fractious oil cartel can only dream of doing the same. ■

WarmWash•45m ago

The most fascinating thing about this is how oil futures markets were able to capture this while the media was endlessly blasting stories about oil shortages.

Anyone paying attention to oil prices since the start of the war has been confused about the total disconnect between oil future and the existential situation on the ground. Even the media seemed mystified by this.

Well, now we all know the answer.

tristanj•39m ago

No, it's because oil is still transiting the strait. A select group of tankers has been bypassing the Iranian "blockade" and ferrying oil across for months now.

An estimated ~2–5 million barrels per day transit via dark transfers.

https://www.telegraph.co.uk/world-news/2026/06/05/us-secretl...

https://www.bloomberg.com/news/articles/2026-07-16/dark-ship...

https://www.reuters.com/business/energy/us-is-using-an-irani...

kajaktum•30m ago

There’s also a landed pipeline that is able to carry oil out to the west

IAmBroom•27m ago

It's all of these. If you maintain any major export path, or decrease demand, prices rise far less than they would otherwise.

glimshe•22m ago

Whenever I think the Economist has hit rock bottom, they never fail to find a new low. The United States is the world's greatest oil power.

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