China and the United States have provided critical support to the oil market and helped ease the huge supply disruption in the Middle East and kept energy prices from surging even higher.
The oil market has lost about 10 million barrels per day (bpd) of exports from the Persian Gulf due to Iran’s blockade of the Strait of Hormuz, according to the International Energy Agency‘s latest update this week.
It is the largest oil supply disruption in history, equivalent to about 10% of total global consumption. But crude prices on Thursday closed just above $100 per barrel, which is lower than the prices seen during smaller supply disruptions such as the one following the Russian invasion of Ukraine in 2022.
One explanation is China and the U.S., the world’s two largest economies, wield considerable influence over the oil market, and are using it to help plug the supply gap. China is the largest oil importer in the world. The U.S. is the biggest oil producer and an important exporter.
Exports surge, imports fall
Oil exports from producers outside the Middle East, led by the U.S., have surged by 3.5 million bpd during the Iran war, according to the IEA. Meanwhile, China has slashed its oil imports by 3.6 million bpd, roughly equivalent to Japan’s entire daily consumption.
Together, the moves total 7.1 million bpd, or about 70% of the exports lost from the Gulf. Japan, South Korea and India, meanwhile, have collectively reduced their imports by 3.6 million bpd, the IEA found.
“The U.S. and China are providing important forms of adjustment to compensate for the export disruption from the Persian Gulf,” Deutsche Bank analyst Michael Hsueh told clients in a note on Tuesday.
That’s probably why international benchmark Brent crude prices have not surged to $120 per barrel, Hsueh said.
China’s import reduction is “remarkable” and “the single most important component” explaining why oil prices are not higher, Martijn Rats, commodities strategist at Morgan Stanley, told clients in a Monday note.
President Donald Trump met with President Xi Jinping in Beijing this week. The leaders agreed the Strait of Hormuz must open to support the free flow of energy, the White House said in statement.
It is unclear, however, when the strait will open again to commercial shipping traffic at levels approaching pre-war levels.
Energy Secretary Chris Wright told CNBC on Friday that the world knows Trump is committed to growing the U.S. supply of oil and refined products. Wright said China, as the world’s largest importer, will buy more oil from the U.S. in the future.
“There’s a natural energy trade there,” the U.S. energy secretary told CNBC’s Brian Sullivan in an interview at Port Arthur, Texas. “I suspect we’ll see a growth in their oil imports from the United States.”
Inventory pressure
The question is whether the U.S. and China can sustain their higher exports and reduced imports until the Strait of Hormuz reopens, Rats said.
China held 1.4 billion barrels in its strategic oil reserve, the largest in the world, as of December 2025, according to the U.S. Energy Information Administration. Beijing seems able to sustain itself for months and possibly for the rest of the year even if its inventories fall by several million barrels a day, Rats said.
U.S. inventories, on the other hand, are under pressure, Rats said. The U.S. export surge comes mostly from its inventories, including its strategic reserve, rather than an increase in oil production, the analyst said.
“The ability of the U.S. to continue this elevated level of exports is hard to gauge but appears under more pressure,” Rats said.
The U.S. had a reserve of 413 million barrels at the end of last year, the second largest in the world. It agreed in March to deploy 172 million barrels from its reserve in response to the oil shock.
