China's Crude Stockpiles Keep Oil Prices in Check

Five months into the Strait of Hormuz closure, oil prices haven't skyrocketed to $150 or $200 per barrel as predicted. Analysts pointed to several factors keeping prices in check, including governments tapping strategic reserves and Asia reducing fuel consumption.

However, China's massive crude stockpiles have been the key driver in capping oil price spikes. The world's largest crude importer had amassed an estimated 1.4 billion barrels of crude in commercial and strategic stockpiles before the Iran war, providing a significant buffer against supply disruptions.

Beijing withdrew from the spot market amid the Middle East crisis, slashing its import demand by as much as 40% in June compared to pre-war levels. This sudden decrease in imports helped offset part of the lost supply and kept international crude oil prices capped at around $90 per barrel.