China is notoriously secretive about its stockpiles, saying that revealing its reserves could put it at a commercial disadvantage when purchasing oil. At the same time, however, demand growth in China is slowing (although Chinese oil demand was still around 11.5 million barrels a day in June, the IEA said) and India has taken over as the leader in terms of oil demand growth.
Dave Ernsberger, global head of oil content at S&P Global Platts, told the briefing that China's SPR is a challenge for markets. "The SPR in China is one of a number of unknown factors that mean you can never get too comfortable assuming any set of circumstances in the global oil markets."
He said the exact size of China's SPR was unknown, however, making it a risk that was hard to quantify.
"It never suits any buyer, or bulk buyer, to flag to the market how much they want to buy so we're likely to get a lot of misinformation around that for quite some time to come. SPRs are strategic, as the name suggests, so the government isn't going to talk about it."
However, while China might have millions of barrels of oil stockpiled for either its own emergency use or to sell, demand growth from the country is ebbing. The International Energy Agency (IEA) warned this month that "recent pillars of demand growth China and India are wobbling."
S&P Global Platts' Ernsberger said that the slowdown in Chinese demand was worrying for major oil producers.
"The demand picture is very unsettling for OPEC and for all producers of crude and refined products (and this is seen most significantly in) the slowdown in growth in the Chinese market. China has returned more incremental demand for the oil market in the last five years than any other country in the world and more than almost any of the counties combine. But this year demand growth in China has stalled and that represents a significant change in the environment for producers both in OPEC and outside it."
"The successors to China who will pick up the slack in demand growth aren't quite of a size yet to have the impact that Chinese growth has had. So the demand picture is fairly frightening from a producers' point of view."