Traders and tanker trackers report that China National Offshore Oil Co, a key importer of Russian oil, has been actively directing shipments of ESPO blend from Russia’s Far East to a recently launched reserve base. Reports say that the base has been established in the Chinese port of Dongying, and has a 31.5-million-barrel storage facility.

China’s strategic energy reserve is estimated to range from 280 to 400 million barrels, surpassing the capacity of the US Strategic Petroleum Reserve. During times of peace, China’s oil consumption amounts to approximately 14 million barrels per day. This fast stockpiling, way beyond what is generally consumed, is being seen preparation for an upcoming uncertain future, possibly war.

The majority of the recent influx now originates primarily from Russia, with energy exports to China increasing by approximately one quarter last year, reaching a record 2.14 million barrels per day.

“ESPO discharges into Dongying began surging … after the port put into use three new berths able to dock Aframax vessels,” Emma Li, senior China oil analyst with Vortexa – a ship tracking platform, told Reuters. Each ESPO cargo is about 100,000 metric tons or 740,000 barrels and the oil is typically carried in Aframax-sized tankers, Li explained.

For the second consecutive year, the Kremlin has emerged as Beijing’s top energy supplier, surpassing Saudi Arabia. This shift allows China to capitalize on significantly discounted Russian oil, as multiple other buyers have been deterred by US and Western sanctions following Russia’s invasion of Ukraine.

The unconventional move is increasingly viewed as a strategic move to shield Beijing from potential future conflicts or international sanctions, particularly in anticipation of repercussions that could arise from a potential Chinese invasion of Taiwan, according to traders and experts.