BEIJING — China played a central role in stabilizing the global oil market during the recent Iran war, preventing crude prices from reaching the $150 per barrel analysts had predicted. The country, the world's largest oil importer, slashed its crude imports by half between February and June, a reduction of 5.5 million barrels per day.
The conflict caused the largest petroleum supply shock in history when Iranian munitions rendered the Strait of Hormuz unpassable, trapping 14 million barrels per day of crude inside the Gulf. Other governments also responded to the crisis.
Petro-monarchs in Abu Dhabi and Riyadh directed an additional 5 million barrels per day through bypass pipelines. Ministers in Washington and Tokyo released a record 2 million barrels per day from emergency stocks. State-led rationing in poorer nations further reduced demand.
Experts calculate China's import reduction alone shaved $30 or more off Brent crude, the global benchmark. This demand cut exceeded half of the worldwide decline of 9 million barrels per day seen during the COVID-19 lockdowns, when the global economy entered recession.
Unlike the pandemic period, China's gross domestic product continued to perform well during the war. The country did not reduce its foreign crude purchases because of economic suffering.
This ability to adjust oil demand provides China with market power comparable to the Organization of the Petroleum Exporting Countries and its allies, which have long influenced prices through their control of half of global oil output. OPEC's influence is currently diminishing following the recent departure of the United Arab Emirates from the cartel. The remaining Gulf members also face strained production capacity, further highlighting China's growing market leverage.
Unlike OPEC+, which requires agreement among 21 nations, China's central planners can act unilaterally. President Xi Jinping's government employs three primary mechanisms to influence petroleum markets.
One key lever involves its national petroleum stocks. In the 12 months leading up to early 2026, China acquired 200 million barrels of crude at reduced prices, responding to the prospect of a "superglut" that had depressed crude values. These purchases supplemented China's already substantial reserves, which totaled 1 billion barrels. Traders estimate that China's pre-war buying spree contributed an increase of $10 to $20 to the global price of a barrel before the Iran war began.
Of the 11.6 million barrels per day China imported in February, up to 1 million barrels per day represented excess purchases that could subsequently be forgone by reducing its stockpiling. Once its final pre-war Gulf cargoes arrived in late April, China began drawing down these reserves.
By July, China's inventories had decreased by 70 million barrels, according to data from Vortexa. This strategic release of stored crude further mitigated the supply shock caused by the Strait of Hormuz closure.
