China spent years preparing for this oil scramble

China is a top global consumer of crude oil, importing roughly 70% of its supply. On paper, it appears quite exposed to global oil shocks.

While the country is far from immune, China is actually better positioned in this oil crisis than one might think.

Remember Aesop’s fable about the ant and grasshopper? The grasshopper plays all summer while the ant works hard to store food for winter. Well, guess which insect China is?

“China has been really deliberate about preparing for these types of shocks,” said Conway Irwin, director of climate and cleantech at S&P Global Energy.

She said while things were getting tense last year with the U.S. and oil exporters like Iran and Venezuela, China focused on growing its already massive oil reserves.

“Adding to that reserve was a really smart hedge against the potential for future price volatility. And that's especially true because at the time, China was getting discounted barrels from Iran and Russia because of sanctions,” Irwin said.

Put another way?

“The rain has come, and China — fortunately for China — has the biggest umbrella,” said Cullen Hendrix, senior fellow at the Peterson Institute for International Economics. “China entered the conflict with these crude inventories estimated between 1.1 and 1.4 billion barrels, which is enough to cover about 120 days of imports.”

China has also been intentional about finding oil outside the Middle East.

“The Chinese sourcing approach is very diversified,” said Gabriel Collins at the Center for Energy at Rice University’s Baker Institute.

It’s not just the oil supply that’s diversified, he said. It’s the whole energy system.

“Much of the world still operates on petrostate principles in terms of being very oil-centric, the Chinese are working to become an electrostate,” Collins said.

While China’s big bet on electrification isn’t a silver bullet, it is helping the country weather this crisis, said Erica Downs at Columbia University’s Center on Global Energy Policy.

“The conflict itself is almost certainly going to make China double down on its push to electrify its entire economy,” she said.

This basically proves China’s strategy, which includes pivoting to renewables, was the right one, said Gang He, a professor of climate and energy policy at City University of New York.

“[It] shows the benefits to accelerate our energy transition towards more renewable and clean energy,” he said.

That could be a lesson other countries learn the hard way.