China’s recent reduction in crude oil purchases—which had helped ease pressures on the global market during a period of heightened geopolitical tension—may soon come to an end, market analysts say. This shift could reduce a crucial buffer in oil supply just as renewed conflicts between the United States and Iran threaten the stability of Gulf oil exports.

Throughout the Iran conflict earlier this year, Chinese refiners significantly pulled back from crude oil buying, a move that freed up barrels for European and other Asian importers amid one of the most severe supply disruptions in recent memory. This slowdown was possible because China had previously built up substantial petroleum inventories. Data from the U.S. Energy Information Administration shows that in 2025, China added an average of 1.1 million barrels per day to its strategic reserves, bringing overall stockpiles to nearly 1.4 billion barrels by the end of that year.

Official Chinese figures indicate crude imports fell by more than 40% in June compared with the same period last year. The International Energy Agency further estimates that in June China drew down approximately 41 million barrels from its reserves. This strategy enabled domestic refiners to meet demand without aggressively competing for new imports.

China is not under immediate pressure to increase crude purchases. Total oil stocks—estimated at about 1.9 billion barrels—are sufficient to cover roughly 117 days of consumption, according to Goldman Sachs. Additionally, China can offset some crude demand by utilizing alternative energy sources. Nonetheless, Goldman analysts expect Chinese crude imports to rise in the near term, largely motivated by lower Middle Eastern crude prices for July and August cargoes. Reduced official selling prices from Saudi Arabia and other Gulf producers aim to attract buyers, potentially prompting Chinese refiners to re-enter the market and rebuild their inventories. Sustained heavy withdrawals from reserves could conflict with China’s stated policy goals to maintain strategic and commercial stocks.

Coinciding with this possible increase in crude buying, Beijing has authorized a significant boost in fuel exports for July. This comes after loosening restrictions imposed in March, including allowing private refiners to resume shipments, according to commodities data firm Kpler.

These developments arise amid resurfacing hostilities between the U.S. and Iran, which have placed additional strain on Gulf crude exports and the crucial shipping routes through the Strait of Hormuz. Following a temporary easing in mid-June, when an interim agreement between Washington and Tehran led to exports rebounding to more than 80% of preconflict levels, attacks this month have pushed flows below 50% of normal volumes. The recovery of exports may be slower than before, as shipping firms remain hesitant to navigate the strait after recent assaults.

Market watchers warn that the combination of increasing Chinese demand and restricted Gulf supply could tighten global oil markets in the short term. Naveen Das, senior crude oil analyst at Kpler, noted that as trading positions adjust amid hostilities and diminished maritime confidence, focus shifts to China’s purchases for indications on price direction.

Goldman Sachs projects Brent crude prices to average $80 per barrel in the fourth quarter of 2026 and around $75 per barrel in 2027. However, they caution that prices could spike above $110 per barrel this year if Gulf exports fail to return to preconflict levels.