China's Mysterious Oil Cuts Keep Prices in Check

The Iran war has seen predictions of catastrophic oil prices, but so far they have barely risen above $100 per barrel. Experts had warned that a shutdown of the Strait of Hormuz could lead to prices reaching $150 or even $200 per barrel within weeks. However, nearly five months after the conflict began, global oil prices have not seen the dramatic increase expected.

The reason for this anomaly may lie in China's unexpected reduction in oil imports. The country, which is the world's largest oil importer, cut its purchases by half compared to pre-war levels, freeing up barrels that would otherwise have gone to other countries.

This significant drop in demand has been met with confusion among experts, who struggle to explain how China managed to meet its energy needs while cutting imports. Theories range from tapping into secret oil reserves to stashing oil in hidden facilities.

Rory Johnston, an oil-markets analyst, noted that 'China was definitely the most important factor in keeping prices down.' However, even if the secret-reserve theory turns out to be true, it leaves unanswered questions about China's motivations for cutting off imports so thoroughly.