China & the Strait of Hormuz.
China is the largest single importer of Hormuz crude in absolute terms, but its share of total imports (about 46%) is the lowest among major Asian importers because of overland Russian and Kazakh pipelines. The strategic reserve is enormous in absolute terms (~850 mbbl), small in days-of-supply terms (~90 days against demand growth that keeps stretching the denominator). The structural risk is concentrated on the Iranian portion of the import mix: sanctioned cargoes that move through ship-to-ship transfers and label changes are uniquely sensitive to any maritime enforcement during a crisis. The PLA Navy's Djibouti base and longstanding interest in Pakistan's Gwadar port reflect this. China's LNG mix is more diversified than its oil mix: the larger chokepoint vulnerability sits in crude, not gas.
Strait status now
EFFECTIVELY CLOSED
Crude imports via Hormuz
46%
Daily import value at risk
$378M
at $73.34/bbl Brent
Strategic reserve
90d
days of net imports
Energy profile
- Oil consumption
- 15.6 mbpd
- Crude imports
- 11.2 mbpd
- Hormuz crude dependency
- 46%
- Hormuz LNG dependency
- 18%
- Reserve days
- 90d
- Reserve volume
- 850 mbbl
Top suppliers
- 01Saudi Arabia· largest
- 02Russia
- 03Iraq
- 04United Arab Emirates
- 05Iran (sanctioned, often relabelled)
Key facts
- World's largest crude importer.
- Approximately 46% of imports transit Hormuz, the lowest dependency among major Asian importers.
- Strategic reserves total ~850 million barrels, the largest in absolute terms after the US.
- ESPO pipeline from Russia and Kazakh-China pipeline provide overland diversification absent from Japan and Korea.
- PLA Navy operates a base at Djibouti; a longstanding interest in Gwadar, Pakistan, sits at the strait's southern approach.
Vulnerabilities
- Iranian volumes, often relabelled at sea, are the largest single concentration; sanctions enforcement during a crisis would compress supply abruptly.
- Refining concentration in Shandong (independent "teapot" refiners) creates uneven distribution risk.
- LNG supply is more diversified than oil; the larger chokepoint exposure is on the crude side.
Mitigations
- Russian ESPO crude pipeline supplies ~15% of imports without sea exposure.
- Kazakh-China pipeline adds further overland flow, albeit at smaller volume.
- Strategic reserve build has been continuous and aggressive; true volumes are state secret but western estimates cluster around 850 mbbl.
- Long-term Qatari and Russian LNG contracts.
- Naval modernisation programme increases blue-water capability around the Indian Ocean.
Historical context
China's strategic-reserve programme accelerated after the 2008 commodity shock and again after 2014. The country has used market dislocations to buy crude into storage at depressed prices; the inventory is therefore both a hedge and a long-only position on energy security.