WASHINGTON -- World oil prices are still high and volatile because the war with Iran has disrupted energy shipments across the Middle East. But the rise has so far failed to match some of the more serious forecasts made when the conflict began.
One reason is China.
Beijing has spent years building up large crude-oil reserves and cutting its exposure to imported energy through electric vehicles and other alternatives. These steps have enabled China to tap inventories and cut crude imports during the conflict, helping to ease another source of incremental pressure on global oil demand.
The U.S. Energy Information Administration estimated China’s strategic oil stocks at nearly 1.5 billion barrels in the second quarter of 2026. China’s crude imports in the quarter fell to about 8.1 million barrels a day, down 32% from the previous quarter. The decline in Chinese imports helped ease upward pressure on prices from the disruption of oil flows through the Strait of Hormuz, EIA said.
The impact is significant as China is the world's largest importer of crude oil and the second-largest consumer of petroleum and other liquid fuels. The country imports almost all of its crude by sea, meaning it is particularly vulnerable to disruptions in key shipping channels.
China’s stockpile acts as a buffer.
More than a decade ago, China began to build strategic petroleum reserves, in part to lessen the country’s vulnerability to external supply disruptions. EIA estimates that China’s strategic inventories increased significantly in 2025, reaching about 1.4 billion barrels by the end of that year. The agency later estimated the total at about 1.49 billion barrels in the second quarter of 2026.
The reserves have provided Beijing with an extra source of crude as shipments through the Strait of Hormuz have been disrupted.
China has changed its energy mix as well. The fast growth of electric vehicles and other alternatives has cut demand for petroleum-based transportation fuels. “Growth in new-energy vehicles and changes in transportation and industrial demand have impacted China’s oil consumption,” EIA said.
China's role in the oil market is especially important because it is a big buyer of Iran's crude exports. EIA estimated that China accounted for nearly 90% of Iran’s crude oil and condensate exports in 2023; however, sanctions and the use of intermediary trading routes make it difficult to determine precise current volumes.
China cut some excess demand for seaborne crude by reducing imports and using inventories when supply from the Middle East was under pressure.
The market remains exposed.
And China’s buffer has not eliminated the risk of a bigger oil shock.
The Strait of Hormuz remains a critical choke point for global energy supplies. In 2025, nearly 15 million barrels a day of crude oil—around 34% of global crude-oil trade—moved through the strait, according to the International Energy Agency. Most of those shipments were going to Asian markets.
Those recent attacks have increased the pressure.
A Saudi oil pipeline that provides an alternative route around the Strait of Hormuz was severely damaged in a drone attack that was attributed to Iran-backed militias and is expected to be out of service for several weeks, The Associated Press reported. The pipeline can carry between 2.6 million and 4 million barrels of oil a day.
Meanwhile, Iran-backed Houthi forces in Yemen have seized strategic islands in the Red Sea, heightening concerns about shipping through the Bab el-Mandeb Strait.
These developments have kept oil markets on edge. Brent crude last traded above $100 a barrel as shipping attacks escalate.
Trump and Xi prepare for talks.
The energy crisis is likely to be one of the issues that President Donald Trump and Chinese President Xi Jinping discuss when they meet in Washington next week.
The two leaders will meet on Sept. 24. Their agenda goes beyond energy, including trade, Taiwan, artificial intelligence, and other flashpoints in US-China relations. Also on the agenda are discussions of the Iran conflict and economic relations between China and Tehran.
The Trump administration has pressured China to use its economic clout with Iran, including trying to persuade Tehran to restore safer shipping through the Strait of Hormuz. But China has opposed the U.S. military campaign against Iran and has resisted some U.S. efforts to ramp up economic pressure on countries and companies doing business with Tehran.
That leaves the two governments with very different approaches to the conflict even as both have an interest in preventing a prolonged energy shock.
The current crisis also highlights for China the importance of having large energy reserves. But the stockpile is finite, and drawing down inventories is no permanent substitute for disrupted imports.
Analysts also link China’s long-term energy plans to broader national-security concerns, including preparations for possible future disruptions involving Taiwan. Those interpretations remain assessments by outside experts, not an official explanation of every barrel stored in China’s reserves.
For now, Chinese inventories and lower crude imports have helped the global market. But with the Strait of Hormuz still vulnerable and attacks spreading to other energy and shipping infrastructure, the prospect of another sharp oil-price increase remains.
