The global oil market is witnessing a shift in demand dynamics as Chinese crude oil imports fall sharply.
China Oil Imports Decline
According to an X post by The Kobeissi Letter on Sunday, China’s crude oil imports slid 20% month over month in April to 8.2 million barrels per day, the lowest level in at least two years. The decline represents a nearly 30% drop — or roughly 3.5 million barrels per day — from pre-war import levels of 11.7 million barrels per day.
The letter said that the decline in Chinese crude demand nearly matches Japan’s total daily oil consumption. “This is also 2 times larger than the volume supplied by the UAE pipeline that bypasses the Strait of Hormuz,” the letter added.
Hormuz: A Critical Point for Oil
The Strait of Hormuz is one of the world’s most important oil transit chokepoints. Aramco CEO Amin Nasser warned that global energy markets could face a multi-year disruption if oil shipments through the Strait of Hormuz remain blocked. Nasser noted that the market has already lost about 1 billion barrels over the past two months due to the shipping disruptions, significantly impacting supply dynamics.
The ongoing geopolitical turmoil has raised concerns over the stability of oil supplies, with Baker Hughes CFO Ahmed Moghal highlighting that the Hormuz may remain closed until the second half of 2026. This uncertainty has already led to the loss of about 10% of global oil supply and disrupted around 20% of global LNG output, marking it as the most severe oil supply disruption recorded to date.
China’s Import Slowdown Could Ease Global Oil Prices
The post further stated that “Chinese state-owned oil companies have been reselling crude cargoes to European and Asian buyers,” suggesting domestic inventory levels remain comfortable despite tightening global supply conditions.
China, the world’s largest crude oil importer, is “supporting the global oil market even amid severe shortages,” the letter added. A sustained slowdown in Chinese imports could ease upward pressure on global oil prices.
Crude oil (June 2026) futures are hovering near $99 per barrel, while Brent oil (July 2026) futures are trading near $105 per barrel at the time of writing. Peter Schiff thinks that the current oil prices may not return to pre-Iran war levels any time soon amid escalating tensions between Washington and Tehran.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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