China's oil stockpile cushioned Iran war price shock — SkimNews
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- China's strategic oil reserves, estimated at about 1.4 billion barrels at the end of last year per the US Energy Information Administration, helped prevent the worst-case oil price scenarios after the US-Iran war began six months ago, with Brent crude now near $100 a barrel versus a brief April peak of $126.
- China cut crude imports by almost 4 million barrels a day — a 32% drop — in the second quarter versus the first, averaging 8.1 million bpd, which eased global demand and softened prices for the US, Europe, and other markets.
- Defense Priorities' Rosemary Kelanic said the US has been "free-riding off Beijing in a weird way," while retired Rear Adm. Mark Montgomery credited China with building a strategic petroleum reserve in 10 years that took the US 25 years after the 1973 oil crisis.
- Bank of America analysts project oil to average $83 a barrel in the second half of the year but warn prices could rise to $95–$120 if violence worsens and as high as $150 if major energy infrastructure is damaged.
- Fresh Middle East disruptions — Iran-backed militia attacks on a Saudi pipeline, a Houthi seizure of two Red Sea islands, and postponed Gulf talks on reopening the Strait of Hormuz — are straining the fragile buffer.
- Trump is set to meet Gulf Cooperation Council leaders on Tuesday in New York before Xi's Washington visit, with Iran expected to figure in the talks despite remaining US-China disagreements over pressing Tehran to reopen Hormuz.
- Analysts cited believe China built the stockpile partly as contingency planning for possible military action against self-ruled Taiwan, not as an altruistic move, meaning using those reserves now is a calculated trade-off Beijing made to avoid a global price surge.
Why it matters: Trump faces domestic pressure over petrol prices while heading into a summit where Iran policy divides Washington and Beijing; China's import cuts have kept Brent near $100 instead of the $120–$150 worst-case projections, but Houthi seizures of Red Sea islands and militia attacks on Saudi pipelines could unravel that cushion just as Xi arrives in Washington.
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