Five months of a mostly closed Strait of Hormuz have not driven oil to the $150-$200 levels analysts warned of in March. China's crude-buying behavior, not just emergency reserve releases, is the biggest reason why. Beijing cut imports by as much as 40% in June, and its next move will help set the price trend for the rest of the year.
Oil prices have avoided the extreme spikes many analysts predicted in March, even though more than 10% of global crude oil supply suddenly disappeared from the market during five months of mostly closed Hormuz shipping lanes. Crude hasn't even stayed permanently above $100 a barrel.
Reserve releases and China's pullback capped prices
Three forces kept oil from surging to record highs. Governments tapped strategic reserves, including an IEA-coordinated 400-million-barrel stocks release, to offset the billion barrels of crude that never left the Gulf in the conflict's first three months. Asia then cut consumption through fuel-saving measures and lower refinery runs.
Arguably, the biggest cushion came from China. The country had built up an estimated up to 1.4 billion barrels of crude in commercial and strategic stockpiles before the Iran war began, giving it room to withdraw from the spot market once the strait closed and prices spiked. Beijing slashed imports by as much as 40% in June compared with pre-war levels, single-handedly offsetting part of the lost Middle Eastern supply.
Imports fell to a decade low, then rebounded
As of the end of 2025, China held the world's biggest oil stockpile at 1.397 billion barrels, according to U.S. Energy Information Administration estimates — more than the combined strategic reserves of the United States, Japan, OECD Europe, Saudi Arabia, South Korea, Iran, the UAE, and India. China's crude imports fell for a fourth straight month in June, with seaborne arrivals dropping to just over 6 million barrels a day, the lowest monthly level since at least 2016, according to Vortexa. Imports from the Middle East slumped to just 2 million barrels a day, down from an already decade-low around 3 million barrels a day in May, Vortexa's lead China oil market analyst Emma Li said.
Imports then turned higher. Crude arrivals in July rebounded from June's decade low by an estimated 1.5 million barrels a day as barrels moved through Hormuz during the three-week window of the U.S.-Iran memorandum of understanding between mid-June and early July, and as China bought more Russian oil. That memorandum had briefly sent oil prices down to $70 a barrel in late June and early July.
What comes next for Beijing's buying
Oil has since jumped back to $90 a barrel, and renewed attacks around Hormuz and the Bab el-Mandeb Strait could stall China's plans to keep ramping up imports. Chinese refiners may pull back again on cargoes arriving after September. Markets will keep watching Beijing closely — it has acted as the swing demand buyer in the global oil market since the Middle East crisis began in February.
Source: Oilprice.com
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