How China Used Oil Demand Management to Cushion Global Market Shocks
Energy analyst Mehrad Ebad says China’s shifting purchases, strategic-stock strategy and reduced reliance on Gulf supplies helped contain a potential price surge—though several figures cited remain unofficial or are presented as analysis.
According to energy analyst Mehrad Ebad, China moderated recent oil-market volatility by cutting purchases during periods of geopolitical tension and replenishing strategic reserves when prices declined. He said the country’s large share of global consumption, alternative supplies from Russia and Kazakhstan, and expanding reserves helped reduce the risk of a much larger price spike. Some reserve estimates cited in the report are unofficial and remain unverified in the available evidence.
China’s management of its oil purchases has played a significant role in limiting the impact of recent supply disruptions and geopolitical tensions, according to energy analyst Mehrad Ebad, who spoke to Iran’s IRNA news agency.
Ebad argued that China’s approach—reducing purchases during periods of market stress, avoiding panic buying and replenishing strategic reserves when prices eased—helped prevent a much sharper rise in crude prices. In his assessment, the strategy was more effective in the recent period than the production adjustments traditionally used by oil producers and OPEC+.
The analysis comes against a backdrop of heightened uncertainty around key maritime energy routes. According to the IRNA report, developments involving the Bab al-Mandab Strait, as well as disruptions affecting shipping through the Strait of Hormuz, contributed to sharp sensitivity in energy markets. Ebad said prices had moved in response to political news, with oil rising above $100 a barrel after renewed tensions involving Yemen and the Bab al-Mandab route.
Such events have raised concerns about the vulnerability of global oil supplies. The two waterways are important corridors for international trade, and disruption in either can increase shipping risks, delay deliveries and add a geopolitical premium to crude prices. Ebad said the combination of regional tensions and reduced energy supplies could have pushed prices considerably higher, potentially toward $200 a barrel.
His central argument is that China helped limit that possibility by managing demand rather than adding to market pressure. Ebad said China reduced its oil purchases during particularly tense periods, at times by as much as 40 percent. By removing part of its demand from the market and avoiding what he described as emotional or panic-driven buying, China contributed to a decline in price pressure.
The reduction, however, was not presented as a permanent retreat from the oil market. Ebad described it as temporary management aimed at controlling prices. When international prices fell, he said, China resumed purchases to replenish its strategic reserves. This alternating pattern—buying less during price spikes and buying more during periods of lower prices—allowed the country to pursue supply security while limiting its contribution to short-term volatility.
China’s scale gives those decisions particular importance. Ebad said the country accounts for approximately 16 percent of global oil consumption and imports about 10 percent of the world’s crude-oil supply. He described China as the world’s largest oil consumer and importer, meaning that changes in its buying patterns can materially affect the balance between global supply and demand.
The analyst also outlined China’s sources of supply. Before the latest reported military escalation involving the United States and Iran, he said, roughly 20 percent of China’s oil imports came from Russia, 14 percent from Saudi Arabia and about 11 percent from Iran and Iraq combined. Around 35 percent of its total imports, he added, came from Gulf countries.
At the same time, China has been able to reduce some of its exposure to Gulf supply by obtaining oil from Russia and Kazakhstan through land routes and pipelines. Ebad said China has secured a substantial portion of its needs through these channels, often at discounted prices, particularly as Russian oil exports to Europe have been disrupted.
Strategic reserves are central to this approach. Ebad said China plans to increase its oil reserves over the next five years and cited unofficial estimates suggesting that the country’s strategic stockpile has grown to more than three times the size of the United States’ strategic reserves. The report did not provide a source or precise figures for that comparison, so the claim remains unverified within the available evidence.
China’s actions represent a shift in how market influence is understood, Ebad said. Historically, oil-producing countries have been seen as the main actors capable of steering prices by increasing or reducing output. In his view, China’s recent purchase decisions show that a major consumer can also influence the market by changing the timing and scale of its demand.
The strategy reflects a broader effort to build resilience against energy-market volatility. China’s reduced dependence on Gulf supplies, use of pipeline and overland routes, and efforts to expand reserves all serve that objective. Yet the approach also depends on the country’s ability to time purchases effectively and maintain access to alternative suppliers.
Ebad’s assessment presents China as both a large source of oil demand and an increasingly active manager of that demand. By reducing purchases during periods of extreme pressure and increasing them when prices fall, China may have helped moderate short-term volatility while strengthening its own supply buffer. Whether that influence can be sustained through prolonged disruptions remains uncertain, but the episode highlights the growing importance of consumer-side decisions in global energy markets.