China poised to resume major oil imports in August

China's sharp reduction in crude oil imports over recent months has acted as a critical buffer for global energy markets, preventing prices from spiraling higher during a major supply shock triggered by war in the Middle East. As the world's largest crude importer, China's purchasing decisions are now central to the market's trajectory as geopolitical tensions ease.

The conflict, which began on February 28 following an attack on Iran by the United States and Israel, led Iran to effectively close the Strait of Hormuz, a chokepoint for roughly 20% of global seaborne oil trade. This removed more than 14 million barrels per day from the market, causing prices to surge. Benchmark Brent crude futures peaked at $126.41 a barrel on April 30. However, prices have since retreated to around $80, a decline analysts attribute in significant part to China's import slowdown.

Customs data shows China's crude imports plummeted to an eight-year low of under 8 million barrels per day in May, a steep drop from an average of approximately 11.6 million barrels per day in the months preceding the conflict. Analysts say this pullback, driven by a combination of high prices, depleted inventory space,...