When the Iran war effectively shut down the Strait of Hormuz, global energy markets braced for a historic shock.
The forecasts were grim: crude oil prices could surge beyond $150 a barrel, inflation could accelerate worldwide and the resulting energy crisis could push major economies towards recession.
Yet Brent crude has remained surprisingly stable, trading below $90 a barrel.
According to an analysis reported by The Economist, one of the biggest reasons for this unexpected resilience lies in an unlikely source: China.
China’s Oil Demand Shock Absorber
China is the world’s largest importer of crude oil. Normally, any disruption to global supply would force Beijing to compete aggressively with other major consumers for available barrels, pushing prices sharply higher.
Instead, China reportedly responded to the crisis by cutting its crude imports by roughly one-third — equivalent to around 3 million barrels per day.
That reduction has effectively absorbed a significant part of the demand pressure created by the war.
By temporarily stepping back from the international oil market, China reduced competition for scarce supplies, helping prevent the kind of panic buying that could have sent crude prices into triple-digit territory.
In effect, Beijing has become an unexpected stabilizing force in the global oil market.
Years of Stockpiling Made the Strategy Possible
China could reduce imports because it had spent years building one of the world’s largest oil stockpiles.
By the start of the conflict, its strategic and commercial petroleum reserves were estimated at nearly 1.4 billion barrels — reportedly larger than the combined reserves held by all 32 member countries of the International Energy Agency.
This enormous reserve gave China something most oil-importing economies do not possess: time.
Rather than entering the market to purchase crude at war-inflated prices, Chinese refiners could draw from oil already stored inside the country. Domestic refining and industrial activity could therefore continue without Beijing having to compete for every available cargo.
The strategy resembles a massive energy insurance policy.
China bought and stored oil when supplies were relatively abundant and prices were lower. When the crisis arrived, it could reduce its purchases and rely on its reserves.
Electric Vehicles Have Reduced China’s Oil Vulnerability
China’s ability to withstand the shock has also been strengthened by its rapid electrification.
In the first half of 2026, electric vehicles are estimated to have displaced between 1.4 million and 1.5 million barrels of potential oil demand per day.
New-energy vehicles now account for more than 60% of new vehicle sales in China, steadily reducing the country’s dependence on petrol and diesel.
The effect is becoming strategically significant.
The difference between China’s current oil consumption and what its transport sector might have consumed had comparable vehicles remained dependent on internal-combustion engines is now estimated to be equivalent to roughly one-tenth of the oil that normally passes through the Strait of Hormuz.
In other words, China’s electric-vehicle revolution is not merely an environmental or industrial transformation. It is increasingly becoming an energy-security strategy.
Every electric vehicle replacing a petrol or diesel vehicle slightly reduces China’s exposure to disruptions in the Middle East.
Protecting Domestic Supplies
China’s response has gone beyond reducing crude imports.
The country has also restricted exports of refined petroleum products in an effort to preserve domestic supplies.
Meanwhile, high fuel prices have accelerated an existing decline in Chinese gasoline demand, encouraging both consumers and businesses to reduce consumption.
This combination — vast stockpiles, lower imports, growing electrification and restrained refined-product exports — has given Beijing unusual control over the timing and scale of its participation in global oil markets.
A New Counterweight to OPEC?
For decades, global oil prices have largely been shaped by the ability of major producers, particularly OPEC and its allies, to restrict supply and influence prices.
China is demonstrating the power that can come from the other side of the market: demand.
Rather than controlling oil by producing more or less of it, Beijing has built the capacity to decide when it needs to buy.
By stockpiling during periods of relative stability and reducing purchases during a crisis, China can soften demand shocks that would otherwise drive prices dramatically higher.
This does not make the strategy cost-free. Maintaining enormous oil reserves requires substantial financial investment, storage infrastructure and careful management. The Chinese economy ultimately bears those costs.
But the global consequences are far wider.
At a moment when the closure of the Strait of Hormuz could have triggered an uncontrollable oil-price surge, China’s ability to step back from the market has bought other oil-importing countries valuable time.
The Iran war may therefore have revealed a new reality in global energy politics.
For decades, the world worried primarily about who controlled the oil supply.
Increasingly, another question may be just as important:
Who has the power to stop buying?
China, through its vast oil reserves and rapid electrification, may have just demonstrated that it does.
