China’s aggressive crude stockpiling and a swift pullback in purchases after the Middle East war erupted in late February helped the global economy sidestep a far deeper energy crisis than the one that unfolded, economists say. That buffer, however, is showing signs of strain as the world’s largest oil buyer gradually returns to the market, CNBC reported.
Paul Gruenwald, global chief economist at S&P Global Ratings, told a conference in Singapore on Thursday that China “kind of saved the day,” crediting the country with helping the world avoid a “doomsday scenario” once the Strait of Hormuz closure choked off roughly 20% of global energy supply.
The mechanism was straightforward. China, the world’s biggest crude importer, slashed purchases after the conflict began and drew down its reserves instead. That combination kept a lid on global prices and shielded its own economy from the worst of the shock.
The scale of China’s reserves
According to estimates from the U.S. Energy Information Administration, China held 1.4 billion barrels of strategic crude oil inventories as of December 2025, including commercial stocks, compared with 825 million barrels in the United States. Its crude imports fell below 8 million barrels a day in May and June, marking the first decline since 2016, the EIA said.
Early forecasts painted a much darker picture. Analysts had projected prices surging to $150 to $200 a barrel once supplies were abruptly disrupted. Gruenwald acknowledged the miss: “Not only did we get the magnitude wrong, sometimes we got the direction wrong,” he said.
Brent crude had settled around $80 a barrel before climbing again in recent days, crossing $100 on Wednesday as hostilities between Iran and the U.S. flared anew in the Gulf. Even at that level, Gruenwald described the price as “digestible” for the global economy.
Signs of a gradual return
The cushion isn’t unlimited. China’s crude imports rebounded 22% month over month in July and 6.2% in August, according to official trade data, though both figures remain well below year-earlier levels.
Krishna Srinivasan, director for the Asia and Pacific Department at the International Monetary Fund, said that if China resumes importing at its pre-war pace, the drag on global growth from elevated oil prices would deepen well beyond current estimates.
Beijing had prepared for precisely this kind of disruption, according to Kai Guo, executive president and senior fellow at the China-focused think tank CF40 Institute. Years of government investment in stockpiling and clean energy built redundancy that allowed oil consumption to fall without denting economic activity, he said, positioning China for a rupture in global supply chains.
Dan Wang, China director at Eurasia Group, said Thursday that China holds roughly four months of crude in national reserves, and a new energy law enacted last year requires major oil companies to hold additional reserves beyond normal commercial inventories. “The economy is basically cushioned from this oil crisis,” she said.
Coal played a supporting role as a shock absorber, Wang estimated, still supplying about 53% of China’s energy mix and allowing the economy to substitute away from oil when prices spiked. She acknowledged the model comes with costs—the waste of investment it implies wouldn’t suit a normal economy. “But when something uncertain like this happens, especially in Eurasia, it works,” she said.
Where prices go from here
Wang expects the Gulf standoff to last at least a year, with oil holding between $85 and $100 a barrel through 2027. Goldman Sachs economist Daan Struyven cautioned in a recent note that prices could still reach $120 a barrel as the war, now in its seventh month, continues to disrupt shipping.
For now, China’s stockpile strategy has bought the global economy time. Whether it can keep doing so depends on how quickly the country’s import appetite returns.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/10/china-crude-oil-iran-hormuz-war-trump-brent-prices-.html
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