As the US and Iran hammer out how to permanently reopen the Strait of Hormuz and restart the flow of Middle Eastern oil, the market’s next move may depend on one country absent from the negotiations: China.

The world’s second-largest consumer of crude oil, China, has pulled out all the stops to preserve supplies as the war in Iran has cut off access to more than 11 million barrels of oil per day. By cutting down on imports, relying on vast stockpiles and utilizing more clean energy, China has been able to cushion the impact of higher prices at home, if not alleviate it completely.

Those actions have been felt in the global market as well.

After more than three months of war, some analysts predicted oil prices could surge as high as $200 a barrel this year. However, even as total estimated supply losses have surpassed 1 billion barrels of oil, crude prices have remained relatively muted. Many analysts point to China as a primary reason.

“China has played a critical role here to buffer this for the rest of Asia… thereby buffering the global economy,” said Daan Walter, principal at Ember, an energy think tank.

On Monday, Brent crude, the global benchmark, fell below $78 a barrel on expectations that the Strait of Hormuz, through which one-fifth of the world’s oil flows, could soon resume normal trade. Brent crude traded below $70 a barrel in the weeks before the US and Israel attacked Iran, and settled at a four-year high of $114 a barrel in early May.

With China’s global energy influence growing, analysts said its policy and consumption patterns will be pivotal for the market, regardless of how quickly the Strait of Hormuz reopens.

China’s ‘invisible hand’

Imported Hyundai electric vehicles are parked at a car yard in Yantai City, China, on June 16, 2026.
Imported Hyundai electric vehicles are parked at a car yard in Yantai City, China, on June 16, 2026.
Costfoto/NurPhoto/Getty Images

In a research note earlier this month, Societe Generale analysts wrote that a 7% loss in global crude supply from the 1973 Arab embargo resulted in a 134% increase in the price of oil. But prices haven’t spiked nearly as much during the war in Iran, despite the conflict impacting 14% of global supply.

They attributed the contradiction largely to China as “the invisible hand that is rebalancing the market,” due to its ability to curb oil imports by about 3 million barrels per day – an amount nearly equal to Japan’s total crude demand.