When Trump launched the U.S. campaign against Iran in late February, energy analysts warned that a protracted conflict could more than double oil prices. Six months later, while prices remain volatile – Brent hovering around $100 a barrel after briefly touching $126 in April – the most dire projections have not materialised.
Chinese President Xi Jinping, who is set to make a state visit to Washington next week, can claim credit for tempering the market. Beijing has built the world’s largest oil stockpile, estimated at 1.4 billion barrels, and has used those reserves to slash crude imports by roughly 32 % in the second quarter, cutting daily imports to about 8.1 million barrels.
The reduction in Chinese demand eased global demand pressure at a time when the Strait of Hormuz – a key shipping lane – has been intermittently disrupted by Iran‑backed militias and Houthi attacks in the Red Sea. Analysts at Bank of America project oil could rise to $95‑$120 a barrel if disruptions persist, with spikes up to $150 possible, but China’s import curtailment has kept prices from reaching those levels.
U.S. officials have pressed China to leverage its economic clout to pressure Tehran to end the conflict, but Beijing has resisted, citing opposition to the war and concerns over its own strategic interests. The Trump administration has also warned China against aiding Iran’s military efforts, even as reports of Chinese satellite imagery sharing with Tehran have surfaced.
Energy experts say the impact of China’s strategic reserve is the single greatest factor moderating oil prices since the war began. Retired U.S. Navy Rear Adm. Mark Montgomery noted that China achieved in a decade what the United States took 25 years to do after the 1973 oil crisis – building a reserve capable of buffering the market.
The upcoming Trump‑Xi talks are expected to address the Iran conflict and the Strait of Hormuz, though both leaders have been cautious about public disagreements. Trump has downplayed the war’s duration, calling it a “little excursion,” and predicts prices will fall once hostilities end, while Chinese officials have neither confirmed nor denied any private agreements discussed in prior meetings.