China Slashed Oil Imports 40% to Absorb the Iran War Shock, but Its Stockpile Buffer Is Shrinking
Goldman Sachs estimates Brent could have been $10-$15 higher without China's demand compression, but the drawdown that enabled it has limits.
ICE Brent crude front-month was trading at $104.65 per barrel on Thursday (2026-09-10), well above triple digits and yet, given the scale of what happened to Middle East supply, surprisingly contained. Goldman Sachs estimates the market could have been $10 to $15 per barrel higher had China not intervened on the demand side.7
China's mechanism was blunt. Between February and May the country cut its crude purchases by 4.6 million barrels a day, a 40% reduction from pre-war volumes, according to International Energy Agency data. No policy announcement preceded it. Beijing simply stopped buying.7
That was possible because of what China had accumulated during the cheap-oil years before the conflict. The country imported about 12 million barrels a day in the second half of 2025, maintaining that pace through February, according to US Energy Information Administration data. By the time the Iran war broke out in late February, China was sitting on an estimated 1.4 billion barrels in commercial and strategic stockpiles, a figure cited by Rosneft chief executive Igor Sechin.6,7
Those barrels are now moving in the other direction. Goldman Sachs estimates 1.3 million barrels a day of July's import reduction reflected China drawing down inventories rather than cutting consumption. The difference is significant: a drawdown-led reduction is bounded by what China stored, not anchored to its long-run demand trend. Goldman puts China's visible stocks still above 1.1 billion barrels, but the direction since May has been one-way.7
Sechin, a longtime OPEC critic and close ally of Vladimir Putin, put it plainly. China "has strengthened its position of the ultimate swing buyer on the global market and has taken the initiative from OPEC," he said. June Goh, an analyst at Sparta Commodities, made the same point to Reuters: "They've become the swing demand centre."6,4
OPEC+ has had little answer. Before the US and Israel launched attacks on Iran in late February, the alliance accounted for more than 48% of global oil production, based on IEA data. By July that share had fallen to roughly 40%, according to IBTimes calculations using the same agency's figures, as Hormuz transits dropped to single digits per week and Iranian barrels largely exited seaborne trade. Production announcements that once moved prices sharply are generating muted responses.5,3
Global supply has partially recovered. IEA data show output climbed 4.1 million barrels a day to 98.8 million barrels a day in June, as cited in Rigzone analysis. But production still ran roughly 9.4 million barrels a day below pre-conflict levels even after that recovery. Saudi Arabia has been rerouting crude to circumvent Hormuz where feasible; the logistical limits of doing so at scale remain a genuine constraint.1,4
China's strategic flexibility across the price cycle has been the defining feature of this disruption. Its buying spree through the second half of 2025 may have accounted for as much as half of global oil demand growth in that period, according to Reuters reporting, underpinning prices when they were low. Its import compression since February has capped prices when they ran high. Few actors in oil markets have wielded that kind of influence across both sides of the cycle without holding a formal OPEC seat.4
Not all of the import decline reflects stockpile management. Chinese oil consumption is forecast to fall 4.9% across 2026, per Breakingviews data, driven partly by coal-based petrochemical feedstocks and electric vehicle penetration eating into oil demand. Rystad has separately noted that China's crude import data has fallen more sharply than its underlying oil use, implying the stockpile drawdown has been masking firmer domestic consumption than the headline import figures suggest.2,7
China does not disclose its storage levels. Goldman's estimate that visible stocks remain above 1.1 billion barrels leaves substantial uncertainty around the strategic reserve component, which Beijing keeps opaque. If the drawdown continues at the pace implied by July's figures, China will eventually need to return to the market in volume. That return would arrive against a supply backdrop still running nearly 9.4 million barrels a day short of pre-conflict norms, and an ICE Brent crude front-month that at $104.65 on Thursday (2026-09-10) may look like a floor rather than a ceiling.7,1