China oil stockpiles helped cap price surge during war

China’s large crude inventories and a subsequent pullback in imports helped soften the blow from the Middle East war after it erupted in late February. The shift gave the global oil market an important cushion at a time when traders feared a severe supply shock.

How Beijing’s demand changes mattered

Paul Gruenwald, global chief economist at S&P Global Ratings, said in Singapore that China “saved the day” and helped the world avoid a much worse outcome when disruption around the Strait of Hormuz threatened a large share of global energy flows. China cut purchases after the conflict began and drew on its stored barrels instead of competing aggressively for seaborne supply.

The U.S. Energy Information Administration estimated that China held about 1.4 billion barrels of strategic crude inventories as of December 2025, including commercial stocks. That compares with roughly 825 million barrels in the United States. China’s crude imports fell below 8 million barrels a day in May and June, marking the first such decline since 2016.

That retreat in buying helped keep a lid on international prices while also protecting China’s own economy from the full force of the disruption. Before the conflict, some analysts had warned that crude could jump to between $150 and $200 a barrel if supplies were suddenly cut off.

A buffer that may be fading

Those worst-case projections did not come to pass, and Brent crude had eased to around $80 a barrel before climbing again in recent days. Prices moved back above $100 a barrel on Wednesday as hostilities between Iran and the United States intensified in the Gulf.

Gruenwald said that level is still manageable for the global economy, but the buffer is not unlimited. The recent rebound in prices shows how quickly markets can tighten again if the conflict worsens or if buying from China returns more forcefully.

Economists are now watching whether Beijing’s resumption of purchases reduces the spare capacity that helped stabilize the market earlier in the year. If that happens while tensions remain high, the same stockpiles that blunted the shock could become less effective as a shield.

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