China’s $468B energy push rattles global oil markets

China’s energy firms have reportedly spent around $468 billion on oil exploration and production since 2019. The amount is 25% higher than E&P spending in the last six months.

Bloomberg reported that the amount was enough to make PetroChina the biggest investor in exploration and production globally. The largest producer of offshore crude oil and natural gas in China, CNOOC, announced last month that its pipeline network had expanded to 10,000 kilometers.

China boosts local oil production

All of this is becoming a huge headache for the world’s largest oil & gas producers

From Exxon to Shell, Big Oil has grown used to having China as the engine for global fossil-fuel demand. Indeed, for much of the last decade, it accounted for 60% of global oil demand growth pic.twitter.com/mWTRZNMqOz

— Stephen Stapczynski (@SStapczynski) November 5, 2025

The Chinese oil heavyweight also said that the network would soon expand to 13,000 km. The initiative comes as CNOOC announced a fresh offshore discovery in the South China Sea. The firm, along with all Chinese oil companies, has been ramping up domestic oil and gas supply.

Chinese state oil giants CNOOC, Sinopec, and PetroChina recently discontinued purchases of Russian oil as the heightened sanctions situation on the mainland becomes clearer. The initiative came as the U.S. made a new attempt to squeeze Russian oil revenues by imposing sanctions directly on two of the country’s largest oil exporters. The report revealed that exporters to Beijing were turning back, and others were being canceled.

Beijing reported a drop in oil imports in October, from 11.5 million barrels per day in September to 11.4 million barrels per day in the following month. However, Beijing experienced a surge in oil imports from the previous year.

Beijing has increased its crude oil import rates despite the commodity’s demand remaining weaker than in previous years for much of the year. Stock-building has been the main driver behind China’s higher import rates.

China has been building its crude oil inventories at a rate of nearly 1 million barrels per day, which are currently estimated to be between 1.2 billion and 1.3 billion barrels. The country is also building new storage capacity, indicating that it will likely continue to expand its oil reserves in the future. 

Beijing’s new storage capacity, planned at 169 million barrels in total, is scheduled to be built over the next two years. The country is simultaneously expanding domestic production of both crude oil and natural gas, while boosting import supply to mitigate potential disruptions.

“In the last few years, we have seen an energy crunch all around the world. Gas and LNG are like tap water and bottled water. Tap water is cheaper and is more reliable, and the logistics are easier. So we push for domestic production.”

–Huang Yingchao, Vice President of Natural Gas at PetroChina International.

According to Bloomberg’s report on China’s energy supply strategy, the initiative won’t be favorable for Big Oil. Beijing has driven global demand growth and profits in the energy sector for several decades. 

China’s recent trends in demand growth have had a significant impact on prices, as market perceptions shift, which has also affected Big Oil’s net profits. The country has maintained 60% of global oil demand growth over the past decade; however, the demand is dropping due to China’s surge in domestic supply.

China ramps up its gas exports and imports

China has also been ramping up its gas output and imports from parties other than Big Oil. The country partnered with Russia two months ago to construct the Power of Siberia 2 pipeline. According to the announcement, the initiative would result in an annual export capacity of over 100 billion cubic meters. 

Beijing has also been building up its energy self-sufficiency, which includes wind and solar. The country built out the largest wind and solar capacity in the world, reducing demand for other energy resources. 

Michael Meidan, director of China research at the Oxford Institute for Energy Studies, argued that Chinese oil majors have surprised themselves by exceeding production targets. He also believes that China is gaining a sense of control, especially as oil demand is declining.

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