A Tale of Two Strategies: China’s Aggressive Crude Stockpiling and U.S. SPR Stagnation

Over the past year, the global oil market has taken a striking turn. On one side, China has aggressively used market opportunities to accelerate its strategic crude oil stockpiling, sometimes absorbing more than 1 million barrels of surplus (mostly Russian) crude daily into its reserves as domestic demand growth cooled and prices softened. On the other, the United States has taken a more cautious approach, only modestly replenishing its Strategic Petroleum Reserve (SPR) despite earlier public discussions about the benefits of “buying low” after historic SPR sales during the price spikes of 2022.

In 2022, the U.S. drew heavily on the SPR, eventually selling over 200 million barrels to address the energy supply disruption and price volatility fueled by the Ukraine conflict and other global shocks. Since then, much attention has been devoted to the potential for the U.S. government to take advantage of lower oil prices to refill the SPR. However, the pace and volume of SPR replenishment have been modest – despite oil prices dropping from over $90 a barrel (bbl) in 2022 to below $65-$75 by mid-2025 (currently less than $60 per barrel). In contrast, China has moved assertively to acquire large volumes and expand its own reserve capacity, supporting both its energy security and its influence in oil markets.

The figure below charts the recent trajectory of the U.S. SPR inventory alongside average monthly West Texas Intermediate (WTI) oil prices. The juxtaposition visually underscores key inflection points: when the SPR inventory was drawn down versus times when it was increased, and how those moves aligned with market prices. Of note:

• 2020: SPR levels were steady at around 90% of capacity.[1] Prices crashed during COVID-19, briefly hitting record lows.
• 2021: SPR sales began as a result of Congressional mandates and in response to Hurricane Ida. Oil prices rebounded quickly as economies recovered from COVID-19.
• 2022: The SPR drawdown continued and dipped historically deep[2] in response to Russia’s invasion of Ukraine and global supply shocks, while oil prices spiked over $100/bbl.
• 2023-2024: SPR inventories began a modest recovery, but the pace of replenishment fell short of expectations. Although crude prices retreated into the $65-$80/bbl range, with multiple periods dipping below the administration’s stated $75/bbl buy-back target, purchases totaled just 59 million barrels – far less than the 180-million-barrel inventory withdrawn a year prior. With surplus market conditions and an SPR at ~50% of capacity,[3] policymakers had an ideal window to rebuild reserves more aggressively, but only limited volumes were secured.
• 2025: SPR stocks begin to rise modestly. WTI prices remain subdued, in the $60-$70/bbl range.

Monthly U.S. SPR Inventory and Average WTI Oil Price (2020-2025 YTD)Sources: U.S. Ending Stocks of Crude Oil in SPR and Cushing, OK WTI Spot Price FOB from the U.S. Energy Information Administration (EIA).

Bottom Line: Recent market data shows a softening in oil prices and a transition to a “contango” market structure – a classic signal of near-term surplus, with more oil on the water globally and incentive for storage-building. China, recognizing this, has proactively soaked up excess supply, while the U.S. has acted far less aggressively, despite the narrative that government buying should accelerate when prices are low.

Several factors help explain the divergent approaches:

1. Market Structure: China’s central planning allows for more immediate and large-volume purchases, sometimes irrespective of short-term price swings. The U.S. must navigate slower-moving procurement processes that often lag market moves.
2. Logistics and Infrastructure: The U.S. SPR sites require careful scheduling for deliveries, cavern availability, and infrastructure updates, sometimes limiting rapid inflows.
3. Policy and Political Caution: U.S. officials remain cautious of perceptions that aggressive buying might drive prices up or appear politically motivated, adding inertia to buyer action. Furthermore, federal budget considerations have significantly shaped SPR management.

The starkly different SPR strategies reflect not just politics, but also practical and institutional differences in how each country responds to market conditions. Looking forward, with global supplies now long and the price curve still soft, the opportunity for strategic replenishment remains open – but whether the U.S. will seize it, even as China continues to expand its safety net, remains to be seen.