Global oil prices have returned to levels seen before the recent conflict involving the United States and Iran, following a 110-day closure of the Strait of Hormuz. Despite ongoing uncertainties over a possible formal agreement between Washington and Tehran, and continued attacks on vessels in the strategic waterway, the feared surge in oil prices has not materialized.

During the conflict, oil prices fluctuated widely but never exceeded $126 per barrel, often hovering around $100. Although the global economy has slowed, with growth forecasts for 2026 revised downward by approximately 0.4 to 0.5 percentage points, no major economic collapse has occurred. Analysts attribute the relative stability in oil prices largely to moves by China, the world’s second-largest economy, rather than diplomatic or military developments involving the US or Iran.

China has significantly reduced its seaborne oil imports amid the turbulence, easing pressure on an already strained global market. According to trade intelligence firm Kpler, China’s oil imports dropped from 8.5 million barrels per day in April to about 7 million barrels per day in May, the lowest level since 2013 and well below last year’s average of nearly 11 million. This reduction was not driven by a lack of domestic demand but by a strategic decision to rely more heavily on existing oil stockpiles and increased coal consumption for short-term energy needs.

China’s pullback in oil purchases provided relief to other energy importers in Europe, the UK, and neighboring Asian countries by helping to stabilize supply and keep prices from escalating further. The future trajectory of oil prices now depends largely on whether China returns to the market and resumes higher import volumes.

Observers have speculated on China’s motivations for this temporary consumption cutback. Some view it as a calculated demonstration of strength against the Trump administration amid heightened US-China tensions, particularly as Washington perceived attacks on Iran as indirect warnings to Beijing, which maintains close ties with Iran. Others suggest Beijing used the period as a test of its energy security resilience in preparation for potential future disruptions.

China’s broader economic role raises questions about its responsibilities as a major global player. Historically, hegemonic powers such as Britain in the 19th century and the United States after World War II have borne the burden of stabilizing the global economy by acting as consumers and lenders of last resort during downturns. While China has provided significant global liquidity following the 2008 financial crisis and expanded currency swap lines to assist other economies, it has not yet fulfilled the traditional role of a “consumer of last resort.” Instead, China’s approach is described as mercantilist, focusing on demand absorption that contributes to persistent trade deficits in Western economies.

Nevertheless, China increasingly supplies the world with affordable manufactured goods, green energy technologies, artificial intelligence, and capital—roles that have also contributed to global economic stability during periods of crisis. For example, in March alone, China generated more clean energy than the United Kingdom consumes in an entire year, highlighting its capacity to buffer external shocks.

While critics argue that China’s export-driven growth model creates global economic imbalances, the country’s strategies have nonetheless played a stabilizing role amid recent energy market volatility. Moving forward, China’s decisions regarding energy imports and economic engagement will significantly influence the global economic recovery and market dynamics.