China and the United States have provided important support to the oil market, helping to ease major supply disruptions in the Middle East and preventing further spikes in energy prices.
Iran’s blockade of the Strait of Hormuz has cost the oil market about 10 million barrels per day (bpd) of exports from the Persian Gulf, according to this week’s update from the International Energy Agency.
This is the largest oil supply disruption in history, accounting for approximately 10% of total global consumption. But oil prices ended Thursday at just over $100 a barrel, lower than prices seen during smaller supply disruptions, such as after Russia’s 2022 invasion of Ukraine.
One explanation is that the world’s two largest economies, China and the United States, wield significant influence over the oil market and are using it to fill supply gaps. China is the world’s largest oil importer. The United States is the largest oil producer and an important exporter.
Exports are rapidly increasing, imports are decreasing
According to the IEA, oil exports from producing countries outside the Middle East, led by the United States, soared by 3.5 million barrels per day during the Iran war. Meanwhile, China has cut oil imports by 3.6 million barrels per day, roughly equivalent to Japan’s entire daily consumption.
Combined, these movements totaled 7.1 million barrels per day, or about 70% of exports lost from the Gulf. Meanwhile, Japan, South Korea and India have cut imports by a combined 3.6 million barrels per day, the IEA said.
“The U.S. and China are adjusting in important ways to compensate for export disruptions from the Persian Gulf,” Deutsche Bank analyst Michael Xue told clients in a note Tuesday.
That’s probably why the international benchmark Brent crude price did not rise to $120 per barrel, Xue said.
Martin Lutz, a commodity strategist at Morgan Stanley, told clients in a note on Monday that China’s import cuts are “significant” and are the “single most important factor” in explaining why oil prices are not rising.
President Donald Trump met with President Xi Jinping in Beijing this week. The White House said in a statement that the leaders agreed on the need to open the Strait of Hormuz to support the free flow of energy.
However, it is unclear when the strait will be reopened to commercial shipping at levels close to pre-war levels.
Energy Secretary Chris Wright told CNBC on Friday that the world knows President Trump is committed to expanding the supply of U.S. oil and refined products. Wright said China, as the world’s largest importer, will buy more oil from the United States in the future.
“There’s a renewable energy trade there,” the U.S. Energy Secretary told CNBC’s Brian Sullivan in an interview in Port Arthur, Texas. “Their oil imports from the United States are likely to increase.”
inventory pressure
The question is whether the U.S. and China can maintain increased exports and decreased imports until the Strait of Hormuz reopens, Latz said.
According to the U.S. Energy Information Administration, China holds the world’s largest strategic oil reserves at 1.4 billion barrels as of December 2025. Mr. Lutz said that even if inventories were to fall by several million barrels a day, it looked like Beijing could sustain it for several months, possibly into the year.
Meanwhile, U.S. inventories are under pressure, Lutz said. The analyst said the surge in U.S. exports was mainly due to inventories, including strategic reserves, rather than an increase in oil production.
“It is difficult to gauge whether the United States will be able to maintain this high level of exports, but it appears to be under additional pressure,” Lutz said.
As of the end of last year, the United States had 413 million barrels of oil reserves, the second largest in the world. In March, the two countries agreed to deploy 172 million barrels from stockpiles in response to the oil crisis.
