China Charges Back Into The Oil Market As Hormuz Chaos Sends Crude Toward $110

China is returning to the global oil market after months of leaning heavily on its own crude stockpiles, adding another source of demand as Iran war disruptions squeeze supplies and oil prices surge.

China — the world’s largest crude importer — helped cushion global markets earlier this year by dramatically cutting its purchases as the war in the Middle East disrupted flows through the Strait of Hormuz. Chinese crude imports averaged just 8.1 million barrels per day during the second quarter, down 32% from the first quarter, the U.S. Energy Information Administration reported.

“Oil prices will likely remain on an upwards trajectory regardless of what China does until at least one of the three major Middle East supply limiters are resolved,” energy analyst David Blackmon told the Daily Caller News Foundation.

The renewed buying comes as the global oil market is already struggling with disruptions in the Middle East and dwindling inventories. Brent crude rose to roughly $109 per barrel Tuesday while West Texas Intermediate climbed above $106 as suspended Saudi oil loadings and outages at three Libyan oil fields tightened available supplies.

Chinese crude imports rose 6.2% from July to roughly 9 million barrels per day in August after jumping 22% the previous month, ICIS reported, citing official customs data. Chinese independent refiners have also been buying barrels from West Africa, Canada and South America as they search for alternatives to disrupted and sanctioned supplies.

“Those limiters include Saudi Arabia’s shutdown of its East-West pipeline, the Houthi threat to shipping traffic via the Bab el Mandeb Strait, and the Islamic Revolutionary Guard Corps (IRGC) threat to traffic via the Strait of Hormuz,” Blackmon continued. “Certainly a full re-entry by China to aggressively pursue crude imports would raise the pace of price increases, but the trajectory will likely remain regardless.”

China’s pullback from the global crude market had been one of the factors preventing the Middle East supply shock from translating into even sharper price increases. China imported a record 11.6 million barrels per day in 2025 and built its crude stockpiles while prices were comparatively low, Energy Information Administration (EIA) data show.

China’s refineries are now consuming crude faster than imports and domestic production are supplying it. Chinese refiners processed roughly 13.91 million barrels per day in August while imports and domestic production supplied about 13.27 million barrels per day, producing an estimated inventory draw of roughly 640,000 barrels per day, Reuters reported.

“We should not see oil prices spike — the math is showing that the refineries are running hot,” Stuart Turley, president and CEO of Sandstone Group and host of the Energy News Beat podcast, told the DCNF. “China will buy, but they will buy selectively and produce selectively.”

Turley pointed to continued Canadian crude flows into the United States and inventories held by refiners as buffers against an immediate shortage. But the more serious vulnerability may increasingly be what happens after crude reaches a refinery.

“Refined products are a critical point in the global markets, and any refinery running hot will break down,” Turley said. “It is what happens when refineries run at this clip. We have a huge number scheduled for maintenance soon, and they might not make it.”

“Any disruption in refineries will be the critical issue,” Turley added. “Oil will find a way, but refineries are built in decades.”

The distinction is increasingly important as crude disruptions collide with tight supplies of fuels such as diesel. U.S. refineries operated at 97.6% of operable capacity during the week ending Sept. 4, EIA data show. Meanwhile, the national average price for on-highway diesel surged to a record $6.285 per gallon for the week ending Sept. 14, increasing the stakes of an unexpected refinery outage or prolonged maintenance shutdown.

“China knows that oil production is key to domestic economic strength and global geopolitical influence,” James Taylor, president of The Heartland Institute, told the DCNF. “China stepping up its crude oil [purchases] shows why American policymakers must ensure there are no roadblocks to American oil production.”

“Oil is a global market, so production or export disruptions anywhere in the world affect prices here at home,” Taylor continued. “That being said, strong American oil production ensures the American economy, rather than foreign economies, reap the rewards of high global oil prices.”

China is also once again becoming a larger exporter of refined fuels. Chinese oil-product exports climbed 12.7% year-over-year in August to 6.01 million metric tons, their highest level since March 2024, S&P Global Commodity Insights reported.

The renewed competition for crude comes as several of the mechanisms that helped insulate American consumers from the initial Middle East supply shock have weakened. Global oil inventories fell by roughly 3.1 million barrels per day in August to their lowest level since 2023, while the U.S. has drawn heavily from its Strategic Petroleum Reserve during the conflict. Meanwhile, attacks shut down Saudi Arabia’s East-West Pipeline, a critical route used to bypass the Strait of Hormuz.

China had helped cushion some of that pressure by drawing heavily from its own reserves rather than competing for additional barrels on the global market. Beijing entered the conflict with an estimated 1.5 billion barrels in reserve and relied on those stockpiles as disruptions hammered global oil markets.