China has solidified its position as the world's largest renewable energy producer while simultaneously ramping up domestic oil and gas output, a dual-track energy strategy aimed at ensuring national energy security and reducing dependence on imports. According to China's National Energy Administration, crude oil output reached a record 216 million metric tonnes in 2025, while natural gas production increased by 10 billion cubic metres during the same period. Chinese oil and gas firms also expanded the country's recoverable reserves by 1.32 billion metric tonnes of oil equivalent.
Between January and July 2026, crude output increased by 0.9 percent to 4.42 million barrels per day, according to National Bureau of Statistics data. The significant increase in domestic production reflects government policies designed to reduce reliance on energy imports. China has strategically filled its strategic petroleum reserves with discounted Russian and Iranian crude in recent years while working to expand its own production capacity.
This approach has insulated the country from recent price increases driven by the ongoing Iran War and the closure of the Strait of Hormuz. China has successfully diversified its crude sourcing, reducing its dependence on Middle East supplies. According to calculations by S&P Global Energy, China reduced crude imports from the Middle East from 55.4 percent in the first half of 2025 to 44.6 percent in the same period of 2026.
The country has increased oil purchases from West Africa, Latin America, and Russia to mitigate the disruption that much of the world has faced due to constraints on Middle Eastern oil exports. Crude oil imports have declined significantly, falling to the lowest level since 2017 in May 2026, averaging 7.8 million barrels per day. This reduction reflects both increased domestic production and efforts to enhance energy self-sufficiency.
China's 15th Five-Year Plan, released in August 2026, outlines ambitious targets for the energy sector through 2030. The government aims to increase domestic oil and gas production to 440 million metric tonnes of oil equivalent by 2030. The plan also includes expansion of the long-distance pipeline network by an additional 20,000 kilometers, bringing the total to 220,000 kilometers by decade's end.
Natural gas storage capacity is expected to exceed 13 percent of national consumption, while LNG terminal annual capacity is projected to reach 200 million metric tonnes. The government plans to launch a new round of strategic oil and gas exploration auctions this year to attract greater investment and boost output. The five-year plan emphasizes breakthroughs in key technologies for safe and efficient development of deep onshore and deepwater offshore resources.
It also targets advancement in exploration and production of unconventional fossil fuels, including continental shale oil, deep shale gas, and deep coalbed methane. China is simultaneously developing carbon capture and storage capabilities to support its green transition and net-zero objectives. Carbon dioxide injection volume is expected to reach 10 million metric tonnes annually by 2030.
China's National Development and Reform Commission stated that the country intends to establish a modern oil and gas supply system by 2030, balancing safeguarding energy security with advancing green and low-carbon development. The government will also invest in advancing cleantech and support domestic manufacturing in the energy industry, supported by greater digitalization. Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University, noted that while China faces geographic constraints on oil and gas reserves, the country possesses strong capacity in wind and solar power.
Despite establishing ambitious climate targets, China's primary policy focus remains ensuring energy security through diversification and reducing dependence on energy imports. These policies have already demonstrated effectiveness in shielding the country from recent geopolitical disruptions to oil and gas trade.
Source: oilprice.com