China's Oil Import Slump Cushioned Prices Amid Hormuz Crisis; Reopening Deal Risks Demand Surge and Higher Gas Costs

A U.S.-Iran agreement to reopen the Strait of Hormuz, announced in mid-June 2026, could trigger a rebound in Chinese crude purchases after months of sharply reduced imports, potentially tightening global oil markets and adding upward pressure on prices within months. During the preceding conflict that closed the vital chokepoint—through which roughly 20% of global oil flows—China slashed its crude imports from an average of 11.6 million barrels per day in 2025 to as low as 7.8-9 million bpd by May 2026, according to customs data. This reduction, equivalent to about three million barrels daily, helped shield prices from spiking dramatically despite the supply disruption. Bloomberg Economics analysts noted that any recovery in Chinese demand, especially if energy flows remain constrained initially, could reignite inflationary pressures by tightening the market. China has been drawing down strategic reserves and cutting refinery runs while shifting toward alternatives like EVs, but these buffers are finite. Reuters and WSJ reporting confirms imports surged earlier in 2026 before the war but plummeted afterward, with analysts at J.P. Morgan and others warning that resuming normal buying could push Brent crude higher from current levels around $80-100 per barrel. The net effect on consumer gas prices depends on the pace of flow recovery and Beijing's stockpiling needs, but the wallet impact is direct: higher crude costs typically translate to elevated pump prices within 1-3 months.