Saudi Arabia can flexibly increase or decrease its crude oil production in response to market shocks. Therefore, it is known as a "swinging exporter" in the oil market. For a long time, there has been no force on the demand side that could compete with it. Unless faced with a major economic crisis, the import volumes of global oil-consuming countries have always remained stable. But now the situation has changed completely. After the war in Iran, China has become the world's first "swinging importer" of oil.
According to a commentary published by Bloomberg on the 15th, China's transformation into a force stabilizing commodity prices has far-reaching effects beyond the current Middle Eastern conflicts. This change could reshape the energy market landscape and even rewrite Asia's geopolitical dynamics. The military actions taken by the United States and Israel against Iran in 2026 have given rise to what is known as the "Chinese Oil Shield."
Latest data shows that China’s crude oil imports in May decreased by 29% year-on-year, to approximately 31.1 million tons. This amounts to about 7.8 million barrels per day, marking the lowest level in eight years. Imports via oil tanksers experienced an even greater decline, reaching a 10-year low, representing a decrease of more than 45% compared to the average level in 2025.
In May alone, China’s average reduction in maritime oil imports was equivalent to the total oil consumption of Germany, France, and the United Kingdom combined. The article states that, at least based on external data, this significant reduction in imports did not cause any damage to the Chinese economy.
The article states that the current changes are still in their initial stage, and there is little information available about how China will achieve large-scale reduction in purchases. However, it is foreseeable that at the oil market level, this will reduce, or even permanently lower, the geopolitical risk premium that traders add to oil prices. The market now clearly understands that China can effectively hedge against the risks of large-scale disruptions in crude oil supply. Moreover, its impact is even more profound in terms of diplomacy and other aspects. China’s vulnerability to maritime blockades and oil embargoes has been significantly reduced.
The article also mentions the so-called “Malacca dilemma”. The US’s usual tactic of using “energy blockade” to deter China on the Taiwan issue may now be ineffective. The strategic game between China and the US in East Asia will fundamentally change. “If a conflict breaks out across the Taiwan Strait, it would be a paradigm shift.”
June 16, 2026, Qingdao, Shandong Province. At the Yougang Wharf of Qingdao Port in Shandong, a tanker docked there was unloading imported crude oil. IC photo
Over the past twenty years, China has vigorously developed its domestic energy supply. The photovoltaic and wind power industries have rapidly emerged, electric vehicles have been widely popularized, and coal also plays an important role.
At the same time, China has accumulated a large reserve of oil, creating the largest strategic oil reserve in the world. By the end of 2025, China had stockpiled approximately 1.4 billion barrels of oil, which is three times the amount held by the United States and more than six times the amount held by Japan.
In the past few months, various energy management measures have been implemented in China. Taking electric vehicles as an example, their usage increased significantly in April and May. Preliminary data shows that the number of charging sessions on highways in China increased by 50% to 80% year-on-year. In April, coal-fired power generation reached a seasonal high. Despite regular shortages of raw materials, China still utilized its coal chemical industry to produce key products such as fertilizers.
The article predicts that between mid-April and mid-June, China is likely to release 100 million to 200 million barrels of crude oil. This energy regulation is an emergency measure taken in the context of shipping delays in the Hormuz Strait and a disruption in the supply of crude oil to Asia. If the peace agreement comes into effect, it is unlikely that China will continue to intervene in the market at such a high level. There are still uncertainties regarding China's future actions. If strategic reserves have indeed been released on a large scale, it is likely that they will be gradually replenished in the future, which will drive global demand for crude oil in the short term.
The article states that, setting aside short-term market fluctuations, an important shift has taken place. Since 2000, China has been the most crucial factor driving up international oil prices due to its strong demand for oil. Now, China is becoming a stabilizing force in the oil market, which will ultimately have a negative impact on oil prices.
The article concludes that in 2026, China used its oil “shield” to effectively mitigate market impacts, successfully avoiding an energy crisis—something unprecedented in history. Although oil prices rose during this conflict, the increase was far lower than market expectations before the crisis. Inflation remained within controllable limits, and the job market continued to expand. Given the volatile situation in the Strait of Hormuz, such results are truly remarkable.
