Global Macro Chart of the Day (#124): China‘s role in stabilizing oil markets

Research evidence excerpt

Global Macro Chart of the Day (#124): China‘s role in stabilizing oil markets

Global Research

15 July 2026ab

Global Macro Chart of the Day Economics

Global(#124): China's role in stabilizing oil markets

Arend Kapteyn

Economist

China's import compression has offset one-third of the SoH shortfall arend.kapteyn@ubs.com

+44-20-7567 0531

One striking feature of the Strait of Hormuz disruption over recent months has been that

market stress in Asia appeared more acute in March than in June, despite a steady

drawdown in inventories. A key reason was the sharp decline in China's crude and

petroleum product imports, which freed up supply for other consumers to rebuild

stockpiles—or at least secure required volumes. Chinese import volumes have fallen by

42% since March. After still rising by 2% month-on-month in March, imports declined

by 25% in April, 15% in May, and a further 10% in June, according to data released

yesterday.

For context, the reduction in Chinese imports is equivalent to roughly one-third of the oil

supply shortfall resulting from the disruption in the Strait of Hormuz prior to the US-Iran

memorandum of understanding signed in June. Relative to February levels, China's

monthly import volumes have fallen by almost 22 million metric tonnes, equivalent to

around 5.2 mb/d. More precisely, a full closure of the Strait of Hormuz would remove

around 20.5 mb/d of supply from global markets. Before the June MoU, however,

approximately 6 mb/d continued to flow via Saudi and UAE pipelines, while limited

tanker traffic through the Strait reduced the effective shortfall to around 14.5 mb/d

before any strategic stock releases. Subsequent SPR and IEA releases appear to have

offset roughly 3.5 mb/d of that deficit, while the contraction in Chinese imports reduced