Global week ahead: Crude diplomacy casts shadow over Trump-Xi summit

China has quietly amassed the world’s largest stockpile of crude oil.

This is no mean feat for a country that is also the globe’s biggest importer of energy.

It brings a fresh dynamic to Beijing’s relations with the United States, as Premier Xi Jinping prepares to host President Donald Trump for a high-stakes state visit on May 14 and 15.

There is already controversy. China’s Commerce Ministry banned Chinese companies from complying with U.S. sanctions on small refineries that purchase Iranian crude. The so-called “teapot refineries” have been encouraged by Chinese authorities to import Iranian oil because they are seen as immune to foreign sanctions, according to Teneo. The research house warns that China’s non-compliance with the sanctions could prompt Washington to launch a second round of restrictions to clamp down on the Sino-Iranian trade.

Oil markets are no longer dealing with a flow disruption, but with a rapidly compounding stock shock, according to Kpler. The analytics group says that most Middle East cargoes loaded before the war have now been discharged, meaning the inventory drawdown will accelerate and local refining will slow.

The U.S. Energy Information Administration (EIA) estimates that China added an average of 1.1 million barrels per day of crude oil to strategic reserves in 2025, with “preliminary government data indicating that China has continued to build inventories in 2026” ahead of the Iran conflict.

This means that government and commercial oil stockpiles in China averaged around 360 million barrels in December 2025, which compares to America’s strategic reserves of nearly 414 million barrels over the same period.

China’s crude buying binge has helped to prevent even higher spikes in oil prices amid the Strait of Hormuz deadlock. It has also provided a lifeline to Asian importers that have been most directly impacted by the halt in Middle East energy deliveries.

For China, heightened tensions with the U.S. and sanctions-related disruption mean strategic petroleum reserves are acting as a hedge against supply constraints, price volatility and currency volatility, according to the Oxford Energy Institute.

The war in Iran is expected to dominate the meeting between President Trump and Premier Xi Jinping, potentially at the cost of other agenda items like tariffs, rare earths and AI. Beijing’s quiet power play to build strategic oil reserves shifts the energy dynamic between China and the U.S., adding another layer of complexity to this critical meeting.

Monday: EU Foreign Affairs Council meeting

Tuesday: German inflation data, U.S. inflation data

Wednesday: OPEC Monthly Oil Market Report, IEA Oil Market Report

Thursday: U.K. GDP data, BRICS Foreign Ministers meeting

Friday: Credit rating reviews: Germany, Italy and Ukraine