Satellite analysis of China’s crude oil containers reveal China is on a buying spree. Data from Orbital Insight, show 937 million barrels of oil in observable storage. It’s the highest level the company has measured since it began tracking in January 2017.
In floating rooftop tanks alone, data show that China added at least 76 million barrels of oil since lockdowns began in Wuhan on Jan. 23. China still has 1.5 billion barrels of storage to spare.
China’s communist party commission said the low prices offered a chance to build up their reserves. “This is a once-a-century opportunity!” the commission said, according to the Associated Press.
Cylindrical above-ground storage in tanks with floating roofs are just one way of storing the fossil fuel. But Alan Zaccone, head of account management at Orbital Insight says it provides a valuable indication of broader trends.
Traditionally, trade data and government disclosures are our best guess at oil traffic worldwide. Orbital Insight is able to estimate how much oil sits around the globe by measuring the shadows on the floating roofs of oil storage tanks as seen in satellite imagery. Looking at this type of storage gives us an idea of how much any given country is storing, despite what may be reported or how often that information is released.
China’s continued buying spree is dependent on the markets. “The only reason they continue to import is because of the record low price,” according to Lei Sun, a consultant at Wood Mackenzie. If crude prices remain the same refiners may want to import less and use what they’ve stockpiled, he says. China could store an additional half a billion barrels in floating-roof tanks.
Crude is not the only commodity China is stockpiling during the pandemic. The country plans to store 10 million tons of soybeans, 20 million tons of corn, and one million tons of cotton, according to a report from Reuters.