China slashed its oil imports by more than half after the Iran war began, a move analysts say helped prevent global oil prices from climbing even higher despite major supply disruptions.
“China was definitely the most important factor in keeping prices down,” oil markets analyst Rory Johnston <a href="https://www.theatlantic.com/economy/2026/07/china-iran-usa-oil-prices/688086/?gift=9raHaW-OKg2bN8oaIFlCou6OgfFJt1HZK-qCD-xfA5g&amp;utm_medium=social&amp;utm_campaign=share&amp;utm_source=chatgpt.com">said</a>. 
China typically imports about 11 million barrels of oil per day, but cut back on roughly 5 million after fighting disrupted Middle East energy markets and shipping routes, leaving more crude available to other buyers.
Analysts estimate oil could have reached $150 to $200 per barrel had China continued buying at its normal pace, rather than remaining around $90. China imports more than 70% of the oil it consumes, making it especially sensitive to price spikes. Instead of buying expensive crude on the open market, Beijing has increasingly relied on its strategic reserves, though analysts question how long that strategy can continue.  
Before the war, China’s Foreign Ministry <a href="https://www.anews.com.tr/world/2025/06/23/china-warns-iran-israel-war-could-impact-global-economy">urged</a> all sides to de-escalate tensions, warning that regional conflict could disrupt global energy markets.
&#8220;The international community [should] make greater efforts to promote de-escalation of the conflict and prevent regional instability from having a greater impact on global economic development,&#8221; foreign ministry spokesman Guo Jiakun said. 
The U.S. government estimates China holds nearly <a href="https://www.eia.gov/todayinenergy/detail.php?id=67504" target="_blank" rel="noopener">1.4 billion</a> barrels of oil in underground strategic reserves and commercial storage, enough to last between six months and more than a year depending on consumption. 
China employed the opposite strategy during the COVID-19 pandemic, dramatically increasing imports as oil prices collapsed. U.S. crude exports to China jumped <a href="https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/012021-china-data-2020-crude-imports-from-us-surge-211-to-396000-bd-valued-at-628-bil">211%</a> in 2020 while benchmark oil briefly traded below zero, allowing Beijing to stockpile cheap supplies. 
“China is doing this for China, fundamentally,&#8221; <a href="https://www.axios.com/2026/07/30/china-oil-price-iran-power?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosam&amp;stream=top">said</a> Ruby Osman, a senior policy advisor on China at the Tony Blair Institute. &#8220;But obviously it&#8217;s not unhelpful for China that it has become a global public good.&#8221;

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Oil prices climbed above $100 a barrel Thursday for the first time since May as markets reacted to a major escalation in the war with Iran. 
Brent crude, the international benchmark, briefly traded above the $100 threshold after Iranian-backed Houthi militants attacked two oil tankers transiting the Bab el-Mandeb Strait in the Red Sea. The attacks heightened concerns about global oil shipments as disruptions continued in the Strait of Hormuz. Together, the two waterways handle roughly 30% of the world&#8217;s oil.
Goldman Sachs <a href="https://www.marketwatch.com/story/oil-prices-could-surpass-120-per-barrel-if-disruptions-in-strait-of-hormuz-dont-ease-says-goldman-sachs-047f8f88">warned</a> Brent crude could climb as high as $120 per barrel if disruptions continue in both the Strait of Hormuz and the Bab el-Mandeb Strait.
President Donald Trump responded Thursday by <a href="https://truthsocial.com/@realDonaldTrump/posts/116969243226176328">warning</a> Iran would face dire consequences if the Houthis continued targeting commercial shipping.
Trump said on social media that if the Houthis “do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves.” 
Reuters separately <a href="https://www.reuters.com/world/middle-east/iran-flew-irgc-commanders-missile-gear-yemens-houthis-sources-say-2026-07-23/">reported</a> that Iran earlier this month flew military commanders, advisers, gold, and weapons into neighboring Yemen, citing two Iranian sources who said between 10 and 21 Islamic Revolutionary Guard Corps commanders were aboard the flight &#8220;to support Houthi operations and provide training on new missile systems.&#8221;
The spike in oil prices also rattled financial markets. The Nasdaq 100 was on <a href="https://www.bloomberg.com/news/articles/2026-07-23/us-stock-futures-drop-as-traders-focus-on-ai-spending-oil-jumps">pace</a> for its worst day in a month, while the Nasdaq Composite fell <a href="https://finance.yahoo.com/markets/live/stock-market-today-thursday-july-23-dow-sp-500-nasdaq-oil-bonds-earnings-084444369.html">2.6%</a>, the Dow Jones Industrial Average dropped 1.1%, and the S&amp;P 500 lost 1.4%. 
The selloff came despite otherwise encouraging economic news, with initial jobless claims <a href="https://finance.yahoo.com/economy/policy/articles/us-weekly-jobless-claims-fall-123957463.html">falling</a> to their lowest level since 1969. 
A sustained rise in crude prices could also complicate the fight against inflation by increasing fuel and transportation costs throughout the economy.
Despite Thursday&#8217;s surge, Goldman Sachs maintained its forecast for Brent crude to average about $80 per barrel in the fourth quarter, citing stronger-than-expected production and weaker demand from China, South Korea, and the Middle East.

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Oil Prices Surge Back Across Dire Milestone After Houthis Enter Iran War

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During the summer of 2018, President Donald Trump predicted the future. During the G7 in Quebec <a href="https://www.nytimes.com/2018/06/10/world/trump-merkel-photo-g7-summit.html">in June</a> and the NATO summit in Brussels <a href="https://www.theguardian.com/commentisfree/2018/jun/27/donald-trump-nato-europe-ally">in July</a>, Trump warned world leaders their green energy policies and reliance on Russian oil and gas were weakening their economies while strengthening Russia’s — undermining NATO’s purpose.
The President said America would not come to the rescue.
Energy was at the very heart of his words then, and his administration’s actions now. It was at the heart of his ousting of a brutal dictator from Venezuela, home to the world’s largest crude oil reserves.  Energy was at the heart of his decision to remove the U.S. from the Obama-era Paris Climate Agreement and the Joint Comprehensive Plan of Action. Energy is at the heart of the Memorandum of Understanding (MOU) signed between the United States and Iran.
Energy runs the world, and Trump wants to run the world’s energy.
For decades, Iran sold oil on the black market, providing hostile nations like China and North Korea with discounted vital fuel.  <a href="https://www.middleeastmonitor.com/20240507-over-1bn-of-iran-fuel-smuggled-into-pakistan-every-year-report-reveals/">By land</a>, Iran, via its massive, uncontrolled borders, allowed rogue operators to get their hands on oil and petrodollars: Houthis rebels, terrorists in Afghanistan, Syria, Pakistan, and Turkey. These actions have enriched Iran and destabilized the world by financing terrorism and unrest.
By forcing Iran to sell its oil on the legitimate global market, the MOU accomplishes economic and national security objectives. First, adding global supply will bring prices down. From a national security perspective, the U.S. can monitor sales, thus monitor economies and activities.
For example, our naval blockade and control of the Straits of Hormuz provided the information that China <a href="https://oilprice.com/Latest-Energy-News/World-News/Chinas-Refinery-Runs-Hit-Four-Year-Low-as-Crude-Imports-Collapse.html">had cut oil imports</a> by over four million barrels per day.
Since China cannot be trusted to provide accurate information, this number would not have been known otherwise. Any additional knowledge on China’s energy economy benefits our national security readiness.
Because of President Trump’s ouster of Nicolas Maduro and the American companies now operating in the region, Venezuela oil production is <a href="https://oilprice.com/Energy/Energy-General/Venezuelas-Oil-Exports-Hit-Seven-Year-High-as-Global-Buyers-Return.html">increasing around 5%</a> per month. Those companies benefit, U.S. refineries benefit, and because of their participation in the global oil market, oil is not going to Cuba or China via ghost tankers. Those petrodollars, now under the purview of the U.S. Treasury, return legitimately to the government and people of Venezuela — not drug cartels, not Tren de Aragua gangsters, not Haitian warlords.
Control the oil, control the world. The past criticisms of the U.S. as global peacekeepers is based on ex post facto illegitimacy: bad guys have oil, sell it and make money, acquire arms and weapons, and then America comes to the rescue.
No one wants a return of American military foreign intervention where our servicemembers are fighting bad actors fueled by illicit oil revenue. America will not act as “world police” if the bad guys do not get rich and powerful on the front end.
Which takes us back to the summer of 2018. Many world leaders found it easier to laugh at President Trump’s comments about failed green energy projects. After all, he was just a reality show TV star and casino builder who barely won an election, while they were seasoned statesmen who had already outlasted Silvio Berlusconi, the Italian billionaire Prime Minister who tried and failed at populism over three terms.
As the foreign elites rolled their eyes, Russia got richer and more powerful, before invading Ukraine during the weakness of the Biden administration. Right on queue, those same European leaders begged the U.S. to come to the rescue.
Meanwhile, energy poverty moved their individual economies into stagnation. <a href="https://www.dw.com/en/germany-news-recession-looms-as-iran-war-chokes-growth/live-77487978">Germany</a> suffered several quarters of outright economic contraction and is now relieved to only be in a recession. The <a href="https://tradingeconomics.com/united-kingdom/electricity-price">United Kingdom</a> has the highest electricity prices in the developed world. <a href="https://www.globalpetrolprices.com/France/gasoline_prices/">France</a> pays the equivalent of $8.55 a gallon for gas.
All of this was foreseen. All was preventable through a serious energy policy that strengthens us and our allies and prevents our adversaries from becoming powerful and dangerous. American energy dominance sets the agenda for prosperity at home, with no more Maduros and Ayatollahs selling oil in secret to those who seek our destruction. No more Hamas having the funds to orchestrate the October 7th attacks. No more Putins invading Ukraine.
Let those who cry “no blood for oil” rest well knowing control of the oil sets the stage for lasting global peace powered by American energy dominance.
***
Daniel Turner is the founder and executive director of Power The Future, a national nonprofit organization that advocates for American energy jobs. He also runs a sheep and cattle farm in rural Virginia.  Contact him at <a href="mailto:daniel@powerthefuture.com">daniel@powerthefuture.com</a> and follow him on Twitter @DanielTurnerPTF

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Oil prices

China’s Key Role In Your Gas Prices

Oil Prices Surge Back Across Dire Milestone After Houthis Enter Iran War

The Iran MOU Ensures U.S. Energy Dominance