China has seen a significant increase in domestic crude oil production, reaching an average of 4.3 million b/d in 2025, a 12% rise from 2020. This growth is attributed to accelerated drilling activity, rising unconventional output, and restructuring in the country’s upstream sector to enhance energy security.

The Chinese government initiated reforms in 2020 that shifted from state allocation to a market-oriented approach for mining and hydrocarbon rights. This change allowed private Chinese companies to participate in exploration alongside national champions. In 2025, the Ministry of Natural Resources held six licensing rounds, opening up opportunities for non-state operators.

The structural changes in China’s oil and gas industry have led to regional effects, with Tianjin and Xinjiang experiencing production increases, while Heilongjiang saw a slight decline. Despite the policy opening to private companies, state-owned enterprises like PetroChina and CNOOC continue to dominate the industry.

CNOOC has been a standout in production growth, expanding output from 690,000 b/d in 2020 to about 900,000 b/d in 2025. PetroChina has also made significant discoveries, confirming large reserves of shale oil and gas, contributing to China’s overall production increase.

China’s accelerated exploration efforts have started to yield results, with new discoveries like CNOOC’s Bozhong 26-6 field and PetroChina’s shale oil reserves. Despite the country’s oil and gas resurgence, foreign investors are finding limited opportunities due to geopolitical tensions and strict regulations on foreign ownership in strategic sectors.

China’s increased domestic oil production has not significantly reduced import volumes, with seaborne crude imports remaining steady at 10.5 million b/d since 2023. The country continues to rely on imports to cover around 70-75% of total consumption, with major suppliers including Saudi Arabia, Russia, Iraq, Brazil, and Iran.

As China enters 2026 with a stronger domestic production base, the country’s focus on unconventional and offshore exploration is expected to continue. While the nation has become the world’s sixth-largest oil producer, the sustainability of its current production growth and its reliance on imports remain key factors for the future of its oil and gas industry.

Read more at Yahoo Finance: China’s Oil Pumping Power Breaks All Records