China's Reduced Oil Demand Keeps Prices in Check Amid Middle East Tensions

The global oil market is in turmoil due to renewed tensions in the Middle East. The price of oil has surpassed US$100 per barrel for the first time since May, with prices spiking due to unrest and protests from Syria to Portugal to Guatemala.

However, China's reduced demand for oil is keeping a cap on global prices. Despite being one of the largest consumers of oil, China's imports have slowed as it draws on its stockpiles and shifts towards electric vehicles.

The East-West pipeline in Saudi Arabia was damaged by drone strikes, forcing Aramco to shut down the pipeline as a precautionary measure. The pipeline was built to bypass the Strait of Hormuz, which remains a bottleneck in oil shipments.