Insights 
VT 
In September, China imported 570,000 barrels of crude oil per day more than required, based on a comparison of crude oil processing data with import and domestic production figures. This surplus was lower compared to the previous month, which saw stockpiling reach 1 million barrels per day.
China’s reserve purchases have been aiding in mitigating the global oil market’s oversupply. The continuation and volume of these purchases are uncertain, raising questions about their effectiveness in addressing the growing supply surplus.
Impact Of China’s Purchases
Should these purchases fail to persist or be inadequate in volume, the global oil market could experience a further price decline. The situation underscores the potential impact on prices if demand does not match growing supply.
The FXStreet Insights Team aggregates market observations from recognised experts, complementing with additional analyses by internal and external analysts. The information is curated to provide a comprehensive market view.
Based on the data from last month, we see that China’s role in absorbing excess global oil supply is diminishing. The surplus they absorbed in September 2025 was 570,000 barrels per day, a sharp drop from the 1 million barrels per day seen in August 2025. This slowing trend suggests that a key pillar of support for crude prices is weakening.
More recent information reinforces this concern. Tanker tracking data for the first two weeks of October 2025 indicates that seaborne crude shipments heading to Chinese ports have fallen a further 8% from September’s average. This aligns with satellite imagery analysis suggesting China’s strategic and commercial storage facilities are now approaching 95% of their total capacity.
Risk To Oil Prices
This situation presents a clear risk to oil prices, which have already shown signs of weakness. Since the beginning of October 2025, the price for WTI crude futures has softened, falling from over $78 to near $74 per barrel as of this week. With China’s buying cushion gone, the market is now more exposed to the global supply surplus.
For traders, this signals a time to consider strategies that benefit from falling prices or increased volatility. We are looking at purchasing put options on WTI or Brent futures contracts with expirations in the next one to three months. This prepares us for a potential slide back towards the low $70s or even high $60s if oversupply pressures the market further.
We’ve seen this pattern before, particularly during the 2014-2016 period when a persistent global glut caused a dramatic price collapse. While OPEC+ continues to hold its production quotas, any sign of wavering compliance could accelerate a downward price move. The focus now shifts from China’s demand to the discipline of global producers.
