Key facts
- China's crude oil production reached a record 216 million tons last year.
- Total oil and gas output in terms of oil equivalent also hit a record 420 million tons.
- Newly discovered recoverable oil and gas volumes rose 5.6% to 1.32 billion tons of oil equivalent.
- China's oil imports dropped to their lowest levels since 2017 in May and 2016 in June.
- The country is actively working to reduce its dependence on imported energy.
China achieved a record crude oil output of 216 million tons last year, accompanied by a substantial rise in natural gas production, according to the National Energy Administration. The combined output in terms of oil equivalent also reached a record high of 420 million tons. This surge in domestic production is part of China's broader strategy to decrease its reliance on imported energy sources.
Chinese oil and gas companies also expanded their reserves, with new recoverable volumes increasing by 5.6% year-on-year to 1.32 billion tons of oil equivalent. This effort to bolster domestic supply has been supported by government strategies, including filling strategic storage with discounted Russian and Iranian crude, creating an estimated supply cushion of 1 billion barrels.
Despite these production gains, China's overall energy demand continues to grow faster than local oil and gas output, meaning the country is far from achieving energy self-sufficiency. Nevertheless, the increased domestic production has contributed to a significant drop in oil imports, which reached their lowest levels since 2017 in May and further declined in June. While this has helped mitigate the impact of Middle East supply disruptions on the global economy, analysts caution that this trend may not be permanent, as China's rising demand will eventually necessitate an increase in imports.