China Emerges as Dominant Force in Oil Markets Amid OPEC+ Decline

OPEC+, the world's most powerful oil alliance, has lost its market sway six months into the Iran war. The conflict has shut a major export route for Middle Eastern oil and damaged energy infrastructure in several OPEC countries, eroding the group's market share and ability to affect prices.

Its statements and policy decisions barely move oil markets anymore. Instead, cuts in Chinese crude imports have emerged as one of the dominant themes of 2026, helping to balance oil markets amid what analysts describe as the worst-ever supply disruption.

OPEC+ accounted for about 40% of global oil output in July, down from more than 48% before the U.S. and Israel attacked Iran in late February. The war has reduced OPEC+'s ability to quickly raise or cut supply by effectively shutting the Strait of Hormuz, a key export route for top OPEC producer Saudi Arabia and other members such as Iraq and Kuwait.

China's weaker demand for oil has helped place a ceiling on prices this year. Analyst June Goh said China 'has become the swing demand centre'.