China's years of stockpiling of crude and subsequent pullback on oil purchases since the Middle East war erupted in late February helped the world avoid a far deeper energy crisis. But that buffer may face a test as Beijing shows signs of resuming purchases, according to economists.
"China kind of saved the day," and helped the world avoid the "doomsday scenario" when the Strait of Hormuz closure choked off 20% of global energy supply, Paul Gruenwald, global chief economist at S&P Global Ratings, said at a conference in Singapore on Thursday.
The world's largest oil buyer has slashed its imports after the war broke out, tapping into its stockpiles, keeping a lid on global oil prices and safeguarding its economy.
The U.S. Energy Information Administration estimates China holds 1.4 billion barrels of strategic crude oil inventories, compared with 825 million barrels in the U.S., as of December 2025, including commercial inventories. Its crude imports dropped below 8 million barrels a day in May and June, falling for the first time since 2016, according to the EIA.
Soon after the conflict broke out, oil analysts had forecast prices surging to $150 to $200 a barrel on the back of the abrupt supply disruption. "Not only did we get the magnitude wrong, sometimes we got the direction wrong," Gruenwald said.