The Optimal Size of China’S Strategic Petroleum Reserve

The Optimal Size of China’S Strategic Petroleum Reserve

Xiaohang Ren Yumeng Zhang 

Academy of Chinese Energy Strategy, University of Petroleum (Beijing), No.18, Fuxue Road, 102249, Beijing, China

Corresponding Author Email:
31 January 2015
| Citation



Energy security usually considers both the stability of energy supply and security of energy use and it is receiving increasing attention globally. Considering the strategic importance and sensitivity to international change of the crude oil supply, we decided to examine China’s energy security. The first research question of this paper is how suppliers’ unreliability may impact the Chinese oil market and how this affects Chinese oil market decisions. The second research question of this paper is to what extent China should invest in strategic oil storage capacity to mitigate the effects of possible supply withholding by risky countries. The results of this paper is helpful for government decision-making.


Energy security, Oil supply, Oil storage, Game theory

1. Introduction
2. Model
3. Numerical Simulation
4. Conclusions

[1] Bielecki, J., “Energy security: is the wolf at the door?” Q. Rev. Econ. Finance, 42, 235–250, 2002. DOI: 10.1016/S1062-9769(02)00137-0.

[2] Cai G.T., Zhang L., “Progress in China’s energy security research,” Prog. Geogr. 24, 79–87, 2005 (in Chinese).

[3] Chester, L., “Conceptualising energy security and making explicit its polysemic nature,” Energy Policy 38, 887–895., 2010. DOI: 10.1016/j.enpol.2009.10.039.

[4] Chuang, M.C., Ma, H.W., “An assessment of Taiwan’s energy policy using multidimensional energy security

indicators,” Renewable Sustainable Energy Rev, 17, 301–311, 2013.

[5] Hughes, L., “A generic framework for the description and analysis of energy security in an energy system,” Energy Policy 42, 221–231, 2012. DOI: 10.1016/j.enpol.2011.11.079.

[6] Lefèvre, N., “Measuring the energy security implications of fossil fuel resource concentration,” Energy Policy 38, 1635–1644, 2010. DOI: 10.1016/j.enpol.2009.02.003.

[7] Leung G.C., Cherp A., Jewell J., Wei Y.M., “Securitization of energy supply chains in China,” Appl. Energy, 2014. DOI: 10.1016/j.apenergy.2013.12.016.

[8] Martchamadol, J., Kumar S., “An aggregated energy security performance indicator, ” Appl. Energy 103, 653–670, 2013. DOI: 10.1016/j.apenergy.2012.10.027.

[9] Selvakkumaran, S., Limmeechokchai, B., “Energy security and co-benefits of energy efficiency improvement in three Asian countries,” Renewable Sustainable Energy Rev. 20, 491–503, 2013. DOI: 10.1016/j.rser.2012.12.004.

[10]Wang B.F., “A review of discussion on China’s energy security issues,” Econ. Theory Econ. Manage. 6, 75–79, 2006. (In Chinese)