Key facts
- China's oil imports fell by 4.6 million barrels a day between February and May.
- Brent crude oil prices exceeded $100 a barrel on Wednesday.
- China's reduced oil purchases have helped ease pressure on global crude prices.
- China's coal-based petrochemical industry and electric transportation reduce its oil demand.
- One in four trucks sold in China last year was electric.
- Pipelines provide China with direct crude imports from Russia and Kazakhstan.
Oil prices have surpassed $100 a barrel amid renewed US-Iran tensions, raising concerns about supply disruptions. Brent crude breached $100 on Wednesday and traded above $101 on Thursday, while West Texas Intermediate was around $96. Despite the price surge, Brent remains below its April peak of about $126.
China's significant reduction in oil imports, by 4.6 million barrels a day between February and May, has helped to absorb the market shock, according to the International Energy Agency. Goldman Sachs estimates that without this pullback, Brent's fair value would have been $10 to $15 higher. David Fyfe, chief economist at Argus, described China's role as an "important balancing factor." Rystad Energy views this as a new role for China, likening it to a "demand-side OPEC" that influences the market by adjusting its buying volume. This flexibility is supported by China's oil stockpiles, growing electric vehicle fleet, alternative fuels, and diverse supply routes.
China entered the period of high prices with substantial oil reserves, having imported around 12 million barrels a day in the latter half of 2025 when prices were lower. Goldman Sachs estimates China's visible stocks remain above 1.1 billion barrels, allowing it to draw down inventories since May rather than build them. Some Chinese refiners have also resold crude cargoes into the market due to export curbs and weakening domestic demand.
Furthermore, China's extensive coal reserves allow it to produce petrochemicals and synthetic natural gas, reducing its need for crude oil. The widespread adoption of electric vehicles, including one in four trucks sold last year, has also significantly decreased gasoline demand. Claudio Galimberti, chief economist at Rystad Energy, noted that electric heavy trucks have made a meaningful contribution to this shift.
In the natural gas market, China's reduced demand and increased domestic production have led to a 12% drop in LNG imports, easing global gas market pressure. China's energy mix, heavily reliant on domestic coal and renewable sources, makes it less vulnerable to disruptions in global LNG supplies.
China's oil imports are also diversified through pipelines from Russia and Kazakhstan, offering an alternative to the Strait of Hormuz. These pipelines accounted for about 8% of China's crude imports in 2024 and remained steady during seaborne import disruptions. Additionally, Chinese buyers have increased purchases of Russian crude via the Arctic's Northern Sea Route.
While other factors like recovering Gulf production and increased output from the US have narrowed the global oil shortfall, China's role as a "swing consumer" is seen as a stabilizing force. As prices eased in July, China began increasing its oil purchases again.