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China's crude imports are set to recover as it relaxes export curbs, raises run rates, and buys Middle East supplies. Analysts forecast a return to strategic stockpiling later this year.
By Bloomberg July 13, 2026, 11:59:12 AM IST (Published)
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China’s crude imports look poised to recover from a months-long slump as the country relaxes fuel export curbs, raises run rates and snaps up prompt Middle East supplies, with analysts and traders forecasting a return to strategic stockpiling later this year.
The world’s second-largest economy has begun to play an increasingly vital role in balancing the global oil market. Last year, it soaked up excess barrels, putting a floor under benchmark prices. Over the past months, it has done the opposite. To weather fallout from the Iran war, it tapped inventories and put in place export restrictions, allowing refiners to pull back on purchases — and enabling other importers to navigate a brutal supply crunch.
Now, even with traffic through the Strait of Hormuz again slowing to a trickle, it is expected to begin adjusting its course again, adding meaningfully to reserves as soon as the fourth quarter. Consultant FGE NexantECA forecasts stockpiling could reach a rate of 800,000 barrels a day.
“Much will depend on how the situation in the Middle East evolves — whether the ceasefire holds, whether oil flows through the Strait of Hormuz remain at early-July levels or increase further,” said Muyu Xu, senior crude analyst at Kpler. “I expect refiners to take advantage of lower oil prices and improving supply availability to replenish some of their commercial inventories.”
The Persian Gulf will, of course, determine the enthusiasm with which China returns to the market. An interim peace agreement signed last month looks increasingly frayed, with fresh strikes and counterstrikes over recent days, and attacks on ships in the Strait of Hormuz.
But for now, China is showing signs of appetite. In recent weeks, Chinese refiners reemerged for cheap Middle Eastern crude as producers tried to clear their cargo backlog. Independent processors including Rongsheng Petrochemical Co. bought from Saudi Arabia, Iraq and the United Arab Emirates as prices for those grades fell, according to traders. Unipec, the trading arm of the world’s biggest processor Sinopec Group, also took oil from the UAE.
“During this crisis, by reducing demand, it has helped balance the market, and now all eyes are watching the return of Chinese buying,” Energy Aspects analysts led by Amrita Sen wrote in a research note dated June 29.
Energy Aspects forecasts China’s seaborne and pipeline imports will return to pre-war levels by the fourth quarter. The consultant sees inflows of about 7.6 million barrels a day in July, up around 19% from June, rising to above 11 million barrels a day in November, close to pre-war levels.
Beijing imports would help support the benchmark price — already lifted by fresh tension in the Persian Gulf — but costs may still be too high to encourage a return to enthusiastic purchases. Brent crude is below its wartime peak, but was inching toward $80 a barrel on Monday as the conflict drags.
“China will want and need to refill its oil stockpiles, but the country has the luxury of time given the size” of its inventories, said Erica Downs, a senior research scholar at Columbia University’s Center on Global Energy Policy. “China can afford to wait until it deems the price is right.”
China could also benefit from the US’s decision to scrap a temporary waiver for Iranian crude. That’s left millions of sanctioned barrels on tankers seeking buyers — most likely among Beijing’s private refiners, many of whom are eager buyers of discounted crude.
China’s huge stockpiles include commercial and strategic petroleum reserves which help the nation manage availability and price volatility. The SPR is a closely guarded state secret, and its long-term targets are unclear, making it difficult to gauge either inventory levels or the pace of buying.
Third-party data providers give some insight into the overall scale of strategic and commercial stockpiles. Following the drawdown of inventories after Beijing gave the green light for their use in April, Kpler predicts they are around 1.2 billion barrels. The data analytics firm estimates stockpiles fell at a rate of roughly 585,000 barrels a day since early May, while Energy Aspects says they slid by more than 1 million barrels a day in June.
That should now reverse, from the fourth quarter, as the focus on energy security, plus the needs of an expanding petrochemical industry, counter a drop in demand from car and truck drivers. Horizon Insights forecasts an increase at a rate of 500,000 barrels a day, while Energy Aspects expects additions to inventories to climb to around 300,000 a day in November, with upside potential. Goldman estimates 520,000 barrels a day from 2027.
Also Read: Brent crude can rise to $87/bbl if Strait of Hormuz uncertainty persists: ETO Markets
