Abstract: In 2011, China became the world’s second largest consumer of oil with increasing degree of dependence on oil. Economic costs of China’s oil dependency are analyzed from three sections, which include transfer of wealth, possible cost of GDP and macroeconomic adjustment costs. The total economic costs of China’s oil dependence from the year 2015 to 2035 can be predicted by Monte Carlo Method and the relevant sensitivity analysis can be carried out. The results indicate that transfer of wealth plays the leading part, which accounts for 65 percent of the total economic costs due to oil pricing out of control by supply and demand, and large imports. The main influencing parameters include price elasticity of demand, potential GDP loss multiplier, price elasticity of GDP and the price of competitive market. China cannot realize oil independence before 2035, and economic costs of oil dependency will account for about 2.3 percent of the GDP.