Plummeting Over 50%! Amid This Epic Collapse, China Is "Buying the Dip" on Crude Oil

This time, Saudi Arabia has offered deep discounts to key customers—including China—and announced an unlimited purchase policy for one Indian oil company and two Chinese petrochemical enterprises. It is thus no wonder that the China Shipbuilding Industry Association bluntly stated that the global crude oil price plunge is nothing short of a windfall—like gold bricks falling from the sky. Industry insiders estimate that for every $10 drop in crude oil prices, Chinese enterprises and residents collectively save ¥107 billion annually. A Bigger Goal: China’s Strategic Petroleum Reserve Amid this steep price decline, 84 massive oil tankers have collectively set sail for the Gulf to stock up on cheap oil. Beyond meeting daily industrial manufacturing needs, there lies a far more ambitious objective: rapidly replenishing China’s strategic petroleum reserve (SPR). Reviewing China’s history of large-scale crude purchases over the past decade, it becomes clear that whenever international oil prices crash, China accelerates its SPR acquisitions—for instance, significantly ramping up injections during the 2015–2016 oil price lows. According to Zhongda Futures, it is widely believed that China opens its strategic petroleum reserve window once international oil prices fall below $40 per barrel. By international convention, a country needs roughly 90 days’ worth of oil reserves to ensure normal national operations—but China’s strategic reserves still fall short of this benchmark. China began building its strategic petroleum reserves relatively late, only after joining the WTO in the early 21st century. Large-scale construction of reserve bases commenced in 2004. To date, China has established major crude oil reserve bases in Dalian, Huangdao, Zhenhai, and Zhoushan, and is scheduled to complete Phase III of its crude oil reserve base construction by 2020—adding 28 to 85 million tons of crude oil storage capacity. Moreover, according to the *Medium- and Long-Term National Petroleum Reserve Plan (2008–2020)*, China aims to build a total reserve capacity equivalent to 100 days of net oil imports by 2020. In September 2019, the National Energy Administration reported that China’s combined commercial and strategic crude oil inventories stood at approximately 80 days of net imports—still falling 20 days short of the target, or about 25.7 million tons. It is therefore highly likely that, coinciding with the current international oil price collapse, China will make substantial crude oil imports in 2020 to reach its targeted reserve level. Industry insiders estimate that, assuming no constraints from infrastructure or other bottlenecks—including commercial inventory absorbed in March and newly completed strategic reserve facilities—China could theoretically absorb roughly 200 million barrels of crude oil imports. Oil Collapse: Winners and Losers Faced with oil prices slashed in half, China has already sprung into action—calmly snapping up cheap crude to top up its reserves and dramatically cutting import costs. Meanwhile, on the evening of March 19, U.S. Treasury Secretary Steven Mnuchin announced plans to purchase $10 billion—or even $20 billion—worth of crude oil during this low-price period. Yet beneath the oil price collapse, not everyone is celebrating. Foremost among the losers is Saudi Aramco (2222), the world’s largest oil company, whose stock has plunged sharply—erasing over ¥128.74 billion in market value within just nine trading days, equivalent to the entire market capitalization of Kweichow Moutai. U.S.-listed global energy giants have fared even worse: their stocks have collapsed consecutively—so severely that “bankruptcy-level crash” would not be an exaggeration.

South Africa’s Homegrown Black Tech, Forged Under Sanctions: Turning Coal into Oil!

Today, let’s talk about something utterly outrageous yet impressively hardcore: South Africa—virtually devoid of oil reserves—managed, under full global embargo, to turn coal into gasoline! This move is nothing short of a Hail Mary in the energy world! Hi everyone, I’m Fei Ziyu. First, the A-side—background: a life-or-death black tech born from being strangled. What’s South Africa’s situation? Coal-rich, oil-poor, and so oil-starved it was literally gasping. Back then, due to apartheid, the world imposed a total oil embargo—cars couldn’t run, planes couldn’t fly, and the entire nation choked under a suffocating blockade. Most countries would’ve panicked instantly—but South Africa took a wildly unconventional path: “You won’t sell us oil? Fine—we’ll make our own!” It imported Germany’s Fischer–Tropsch synthesis technology, then heavily modified and scaled it up. In short: crush coal, gasify it, catalyze it—and after a series of intense chemical processes, black coal balls magically transform into crystal-clear gasoline! This isn’t magic—it’s a technological miracle forged when backed into a corner. Now, the B-side—development: from backyard workshop to world leader. At first, nobody believed coal could become oil. But South Africa went ahead and founded Sasol—a company that kept refining the process until it mastered it. While others were still tinkering in labs, South Africa had already built factories and begun mass production; while others were still calculating costs, South Africa was already achieving near 50% domestic energy self-sufficiency using this very technology.

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