BEIJING — China significantly reduced its crude imports between February and June, cutting them by half, or 5.5 million barrels per day. This action played a crucial role in preventing global oil prices from reaching the $150 per barrel that many analysts had predicted during the Iran war.
The conflict caused the largest supply shock in petroleum history. Iranian munitions rendered the Strait of Hormuz unpassable, trapping an estimated 14 million barrels per day of crude inside the Gulf.
Several governments contributed to stabilizing the market. Petro-monarchs in Abu Dhabi and Riyadh directed an additional five million barrels per day through pipes bypassing the Strait. Washington and Tokyo released a record two million barrels per day of emergency stocks, while state-led rationing in poorer countries also reduced overall demand.
Experts reckon China's import reductions shaved $30 or more off Brent crude, the global benchmark price.
Despite these substantial import cuts, China's gross domestic product continued to perform well. The country was not reducing its foreign crude purchases due to an economic slowdown.
This ability to control oil demand allows China, the world's largest oil importer, to influence prices. One oil-trading executive described China as "the new OPEC" due to this market power.
For four decades, the Organization of the Petroleum Exporting Countries has worked to keep prices high through production quotas. The OPEC+ cartel has recently been weakened by the departure of the United Arab Emirates and strained production capacity among its remaining Gulf members.
Importers typically cannot keep prices low by rationing demand because buyers are more fragmented than sellers and domestic energy demand results from countless individual decisions. China is an exception due to its statist economic structure. Unlike OPEC+, which requires agreement among 21 countries, China's central planners can act unilaterally on President Xi Jinping's orders.
China moves petroleum markets using its national petroleum stocks as a primary lever. In the 12 months leading up to early 2026, China acquired 200 million barrels cheaply, driven by anticipation of a "superglut" that would depress crude prices. These purchases increased its already ample reserves to one billion barrels.
Traders estimated that China's pre-war purchases may have added $10 to $20 to the global price of a barrel. Of the 11.6 million barrels per day China imported in February, up to one million barrels per day were excess purchases it could subsequently forgo by stockpiling less. After its final pre-war Gulf cargoes arrived in late April, China began drawing down these reserves.
By July, its inventories had decreased by 70 million barrels, according to data from Vortexa.
