Chinese policy around the use of their SPR as a geoeconomic tool, particularly in crisis scenarios, is not well understood. Although China has built its SPR for resilience, the size of the SPR compared to other global oil reserves could give China leverage to use it in a more strategic way. This project investigates potential ways for China to do so. Our analysis, however, does not explore whether China intends to use SPR as a geoeconomic tool.

China's strategic petroleum reserve as a geoeconomic tool

A 'what if' exercise

Ismael Arciniegas Rueda, Henri van Soest, Karishma V. Patel

ResearchPublished Jul 21, 2026

China’s Strategic Petroleum Reserve (SPR) was established in March 2004, with the aim of constructing China’s first oil base to protect the country’s energy security. Since then, China’s SPR has evolved from a small coastal network into a nationwide system of large-scale storage facilities combining central government, commercial and provincial reserves.

While the Chinese SPR is primarily designed to mitigate risks from oil supply chain disruptions, its size compared to that of other countries could give China a large potential leverage on international energy markets and, by extension, in the global economy. In other words, China’s SPR could evolve from an economic policy device to a geoeconomic tool allowing the country to achieve goals such as exercising leverage on other nations, protecting national security, influencing alliances, punishing adversaries and affecting global supply chains.

Nevertheless, Chinese policy around the use of their SPR as a geoeconomic tool, particularly in crisis scenarios, is not well understood. Although China has built its SPR as a resilience tool, the size of the SPR compared to other global oil reserves could give China the leverage to use it in a more strategic way. This project investigates potential ways in which China could do so. Our analysis, however, does not explore whether China actually intends to use SPR as a geoeconomic tool.

Key Takeaways

  • China’s SPR has grown into a substantial and increasingly sophisticated system, with a capacity rivalling the world’s largest oil importers and backed by a recently strengthened legal and institutional framework.
  • RAND researchers participating in a workshop identified the baseline scenario – strategic caution – as the most likely, with China prioritising energy security, domestic resilience and stability through conservative, sparing SPR releases.
  • At the same time, experts viewed the precision relief scenario, where SPR resources are selectively released to specific provinces or sectors facing acute shortages, as highly realistic.
  • Looking ahead, the panel noted that China’s ongoing energy transition – with increased electrification, renewables and nuclear power – may diminish its dependence on oil over the course of the next two decades. This shift could allow Beijing to use the SPR more assertively for diplomatic or geoeconomic gains, especially in crises or when cultivating strategic relationships.

Recommendation

  • The workshop underscored the dynamic role of China’s SPR, suggesting its management will be increasingly consequential for global energy security and international power balances, and highlighted the importance of ongoing monitoring and analysis.

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Arciniegas Rueda, Ismael, Henri van Soest, and Karishma V. Patel, China's strategic petroleum reserve as a geoeconomic tool: A 'what if' exercise. Santa Monica, CA: RAND Corporation, 2026. https://www.rand.org/pubs/research_reports/RRA5069-1.html.
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This research was independently initiated and conducted within the China Research Center using a gift from philanthropist Michael Tang, as well as gifts from other RAND supporters and income from operations. This work was undertaken by the China Research Center and RAND Europe.

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