How China and the U.S. Kept Oil Prices From Spiraling After the Hormuz Blockade
CNBC reported Friday that China and the United States have together absorbed the brunt of history’s largest oil supply disruption, preventing energy prices from spiraling far beyond current levels following Iran’s blockade of the Strait of Hormuz.
The Scale of the Oil Supply Disruption
The blockade has removed roughly 10 million barrels per day from global markets, equivalent to around 10% of total world consumption, according to the International Energy Agency’s latest assessment. Despite that, international benchmark Brent crude closed just above $100 per barrel Thursday. That figure sits below the peaks recorded after Russia’s 2022 invasion of Ukraine, a comparatively smaller shock.
Analysts attribute the restraint to deliberate, coordinated economic pressure from Washington and Beijing. Non-Middle Eastern exporters, led by the United States, have ramped output and shipments by 3.5 million barrels per day. China has simultaneously cut its daily imports by 3.6 million barrels, roughly matching Japan’s entire daily consumption.
Combined, those two moves account for about 70% of the Persian Gulf shortfall. Japan, South Korea, and India have trimmed collective imports by a further 3.6 million barrels per day, the IEA found.
Wall Street Weighs In
Deutsche Bank analyst Michael Hsueh told clients in a note this week that the adjustments from both countries are likely the reason Brent has not breached $120 per barrel. Morgan Stanley commodities strategist Martijn Rats called China’s import reduction “remarkable” and labeled it “the single most important component” explaining why prices are not higher.
Presidents Donald Trump and Xi Jinping met in Beijing this week and agreed the strait must reopen to support global energy flows, according to a White House statement. A timeline for restored commercial shipping remains unclear.
Also Read: IEA Oil Market Report — May 2026
How Long Can the Buffer Last?
The sustainability of these adjustments is now the central question. China held 1.4 billion barrels in strategic reserves as of late 2025, the world’s largest stockpile, and analysts believe Beijing can manage for months even if drawdowns accelerate.
The United States faces tighter constraints. American export gains are drawing heavily on strategic inventories rather than new production increases. The U.S. strategic reserve stood at 413 million barrels at year-end, and Washington committed to releasing 172 million barrels in March.
Energy Secretary Chris Wright told CNBC Friday that the world recognizes Trump’s commitment to expanding domestic oil supply. Wright added that China, as the largest global importer, will increasingly source crude from the United States, calling it “a natural energy trade.”
Also Read: US Energy Information Administration Strategic Reserve Data
What Comes Next
Analysts warn the buffer is finite. If the Strait of Hormuz remains closed for several more months, U.S. inventory pressure could force a pullback in exports. That scenario would remove one of the two pillars currently holding prices near $100 and expose consumers to a sharper price climb.
Read Next: Trump and Xi Agree Hormuz Must Reopen as Oil Markets Watch Closely
