China's Oil Stockpiles Help Keep Prices Low Amid US-Iran Conflict

When President Donald Trump launched his war against Iran in February, energy analysts predicted oil prices could more than double during a protracted conflict. Six months into the ongoing war, the most dire projections have not yet come to pass. Chinese President Xi Jinping's country has helped keep global oil prices from skyrocketing thanks to its massive oil stockpile.

Beijing's strategic reserve is estimated at 1.4 billion barrels by the end of last year, according to the U.S. Energy Information Administration. China's oil imports averaged just 8.1 million barrels per day in the second quarter, down 32% from the first three months of the year. This drastic cut in imports helped ease global demand, softening the upward price effects for the United States, Europe, and beyond.

Rosemary Kelanic, director of the Middle East program at Defense Priorities, said China has been 'free-riding off Beijing' by understanding that high oil prices hurt the global economy, which in turn hurts them. Michael Lynch, president of Strategic Energy and Economic Research, praised China's market management, saying they didn't panic and used their inventories to keep prices down for everyone.