China’s oil import cuts kept global energy crisis in check, fund manager says

China's decision to slash its crude oil imports by more than half has been the single largest factor preventing a catastrophic spike in global energy prices during the Strait of Hormuz crisis, according to a senior energy fund manager.

Jonathan Waghorn, co-manager of the Guinness Global Energy fund, told the Guinness Global Investors' annual conference last week that China cut its imports from a typical 11–12 million barrels per day down to roughly five million barrels per day, leaning heavily on strategic stockpiles and its accelerating shift toward electric vehicles. Waghorn estimated that oil prices could have been $15 per barrel higher without China's withdrawal, which freed up enormous volumes for the rest of the market to absorb.trustnet

"That's a huge volume of oil that China has chosen not to take to allow the rest of the market to balance," Waghorn said.trustnet

A Crisis Contained — For Now

Despite the disruption — which a McKinsey Global Institute analysis described as the largest recent energy supply shock, affecting up to 14% of global oil and gas supply at its peak — oil prices have averaged around $90 per barrel year-to-date and currently hover near $100. The McKinsey analysis found the 2026 shock was more than twice the relative impact of the 1970s oil shocks and more than six times the peak disruption caused by the Russia-Ukraine conflict in 2022.businesstoday+2

Beyond China, the 32 member countries of the International Energy Agency released 400 million barrels from strategic reserves, adding roughly two million barrels per day to global supply. But Waghorn warned that this buffer is nearly exhausted — about 80% of the reserves have already been released, and the U.S. strategic petroleum reserve is approaching its legislated minimum of 250 million barrels.trustnet

A Structural Shift, Not a Blip

China's reduced consumption appears to reflect more than wartime restraint. A July 2026 note from JPMorgan's ↗ 0.66% head of global commodities strategy, Natasha Kaneva, found that China's economy "may be adapting to higher energy prices more efficiently than past experience would indicate," with gasoline demand destruction of around 180,000 barrels per day — 70% of which is expected to persist after markets normalize. Almost two-thirds of new cars sold in China are now electric or hybrid, and refining giant Sinopec forecasts Chinese oil demand will fall 3.9% in 2026.theconversation+1

Lurion De Mello of Macquarie University noted that China's oil consumption may have peaked in 2025, writing in The Conversation that the country's economy grew about 20% between 2021 and 2025 while transport fuel use stayed flat.theconversation

Risks Ahead

The situation remains fragile. A series of drone strikes on September 10–11 damaged Saudi Arabia's East-West pipeline — a crucial alternative export route built to bypass Hormuz — forcing Aramco to shut the line. Meanwhile, Ukraine's continued strikes on Russian refineries have taken refining capacity offline, with Russian petrol production down 20% and diesel nearly 30% year-over-year.theconversation

RBC Capital Markets warns that Brent crude could pass $120 by year's end, while Goldman Sachs The Goldman Sachs Group, Inc. ↗ 1.23% forecasts prices around $55 per barrel by late 2027. Waghorn expects China to re-enter global oil markets when prices fall to between $80 and $85 per barrel — a move that could quickly tighten supply once again.trustnet+1