China has achieved a new milestone in oil production, reaching a record high of 4.6 million barrels per day. Despite being the world’s top crude oil importer, the country continues to ramp up domestic output, primarily from long-established conventional oil fields.
At the beginning of the year, China’s National Energy Administration (NEA) outlined its goal to maintain stable production exceeding 200 million tons in 2025. By March, this goal was already within reach, with production peaking and reversing a decade-long decline in output. Meanwhile, U.S. shale producers have reduced drilling in response to falling oil prices, contrasting with China’s consistent production increases.
Interestingly, while China saw a 1.9% drop in crude oil imports in 2024—the first decline in 20 years—its domestic oil output has continued to grow. According to NEA data, combined oil and gas output surpassed 400 million tons of oil equivalent last year, with crude oil alone accounting for 213 million tons, averaging 4.3 million barrels daily. This trajectory reached new heights in early 2025.
Although forecasts repeatedly suggest China’s oil demand will soon peak, recent projections anticipate a 1.1% rise in demand this year, largely due to the petrochemical industry. Potential trade disruptions from ongoing tariff tensions with the United States could affect this forecast, particularly regarding imports of feedstocks like propane and ethane. However, if trade relations stabilize, demand is expected to remain on an upward trend.
Despite the growing influence of electric vehicles, renewable energy, and battery storage in China’s energy landscape, oil remains central to the country’s strategy for energy security. As such, even in a future where demand plateaus, China is expected to keep increasing its domestic oil output.
China’s determination to boost energy independence has placed it among the top ten oil producers globally, currently competing with Iraq for the fifth spot. This rise in local production may eventually reduce China’s reliance on imports, which could soften its impact on global oil prices over time.
Nevertheless, China still heavily depends on foreign oil. Its domestic output, though rising, meets only a fraction of its daily demand, which stood at 16.68 million barrels in 2024. Still, the government is pushing forward with exploration and production efforts.
Most of the new production gains come from aging oil fields, but the country is also investing in shale development. Earlier this year, Sinopec announced the discovery of 1.3 billion barrels of new oil and gas reserves in two eastern shale fields. Although these resources are buried deep—between 3,000 and 4,650 meters—government support is expected to make extraction viable.
China’s approach mirrors its strategy for expanding wind and solar power. While private sector drillers in the U.S. must respond to shareholder interests, Chinese state-owned enterprises are backed by government policy and funding. This model has proven successful in renewable energy, and Beijing seems poised to apply the same strategy to hydrocarbons—extracting as much as possible from every viable reserve, regardless of forecasts about peak oil demand.
