Yet, analysts warn that China may be approaching the practical limits of what it can produce domestically. Offshore gains are starting to taper, and higher-cost unconventional oil, such as shale, remains difficult to extract economically. Industry projections suggest output will plateau just below last year’s record for the next decade, providing what experts describe as a national security “stabilizer” for essential manufacturing and military needs.
Beijing’s new 2026–2030 energy plan, released on March 5, underscores this approach, setting a target of maintaining output around 4 million bpd. Despite these efforts, China will remain heavily dependent on imports, which totaled 11.55 million bpd last year, as domestic demand peaks amid a slowing economy and a shift toward electric vehicles.
“The three national oil companies are trying to maintain that level as long as they can, which is seen as a minimum to cope with unpredictable supply disruptions,” said Zhu Weilin, a professor at Shanghai’s Tongji University and former chief geologist at China National Offshore Oil Company (CNOOC). The urgency is amplified by global tensions; the ongoing conflict in the Middle East has already reduced crude exports from a region that supplies half of China’s imported oil.
Scraping the Last Grease Off the Plate
China first surpassed the 4 million bpd mark in 2010, at a time of surging demand. Its flagship Daqing oil field, opened 66 years ago and hailed by Mao Zedong as a model of industrialization, remains a key contributor, producing around 600,000 bpd. Engineers there employ “tertiary recovery” techniques—injecting chemicals, heat, carbon dioxide, and gas into reservoirs—to extract what Zhu describes as the “last grease off a plate.”
Such advanced methods have increased output by roughly 20% above traditional water-injection methods. According to Oscar Abbink, upstream technology director at S&P Global Energy, “The scale of polymer flooding in Daqing is unparalleled and highly optimized.” The expertise developed in Daqing has been applied to other aging fields, such as Liaohe and Xinjiang, and even exported abroad, with CNPC teams securing contracts in countries including Saudi Arabia and Iraq.
Tertiary recovery has produced roughly 161 million barrels annually for CNPC over the past two decades, accounting for about 10% of China’s national output, with potential to reach 219 million barrels by 2035. Yu Baihui of S&P Global Energy estimates that such techniques now contribute around 20% of China’s oil production.
Seven-Year Action Plan Spurs Growth
Concerned after output dipped below 4 million bpd in 2016, Beijing launched a seven-year action plan in 2018 to accelerate drilling. State-owned giants pursued challenging projects, from deep onshore formations up to 10,000 meters beneath the Gobi Desert to offshore developments in Bohai Bay and the South China Sea.
CNOOC’s offshore fields led production growth. Bohai Bay, now China’s most productive region, delivered 740,000 bpd in 2025—55% higher than a decade ago—and accounted for 40% of national output growth between 2021 and 2025. Since 2023, the three state-owned oil companies have collectively spent over 400 billion yuan annually on exploration, up from less than 300 billion yuan in 2015.
Costly Shale Plays Begin to Yield
Shale oil, long viewed as commercially challenging, has seen rapid growth. Output rose from 4.54 million barrels in 2018 to 60.44 million barrels in 2025, nearly doubling in just two years. Production comes mainly from lacustrine shale—oil-bearing formations in ancient freshwater lakes, which are more fragmented than North American marine shale.
Despite technical progress, shale development remains expensive. Full-cycle costs range from $45 to $90 per barrel, higher and more variable than in the U.S. Some pilot projects, such as Jimsar in the northwest, have reduced costs to about $45 per barrel through advanced directional drilling. By 2035, shale could contribute 8% of China’s total output, according to Rystad Energy projections.
Analysts expect overall domestic output to remain broadly flat through 2026 before gradually declining. Rystad anticipates production peaking between 2028 and 2030 at around 4.36 million bpd. Meanwhile, China is expanding strategic oil stockpiles to cushion against global supply disruptions.
“A production peak would also signal the limits of policy-driven supply growth and reinforce China’s long-term reliance on global oil markets, even as demand growth slows,” said Matthew Andre, associate research director at S&P Global Energy.