#China #CrudeOil #OilPrice #Hormuz #TheKobeissiLetter #Energy #OilMarket #OilTechnology ๐๐๐๐ฒ
China has just sent an extremely important signal to the world energy market. In April, crude oil imports dropped to only about 8.2 million barrels per day, the lowest level in at least two years.
Compared to the period before the supply crisis, when China imported about 11.7 million barrels/day, the current decrease is up to 3.5 million barrels/day โ equivalent to nearly 30%.
This number is large enough to change the global supply and demand balance.
๐ How large is the scale of the reduction?
Indicators Before conflict April 2026 Reduction level
Crude oil imports 11.7 million barrels/day 8.2 million barrels/day 3.5 million barrels/day
Rate of change 100% 70%-30%
According to Reuters, China's oil imports in April decreased sharply, while inventories still increased by about 17 million barrels, showing that the country still has significant reserves. (Reuters๏ฟผ)
๐ฏ๐ต Equivalent to all of Japan's needs
To put it into perspective, 3.5 million barrels/day is roughly equivalent to the total amount of oil Japan consumes each day.
In other words, China's reduction in imports alone has an impact equivalent to the world's leading industrial economy temporarily disappearing from the oil buying market.
๐ Double the capacity of the UAE's Hormuz bypass pipeline
This reduction is also twice as large as the capacity of the UAE's Abu Dhabi Crude Oil Pipeline, which was built to transport oil out of the Strait of Hormuz.
That shows that China's influence on the oil market is currently much greater than the strategic infrastructure solutions of the Middle East.
๐ข๏ธ Why can China sharply reduce imports?
The most important reason is that China's oil reserves are at a very high level.
Some estimates suggest that the country's total commercial and strategic reserves could exceed 1.2โ1.4 billion barrels. (Reuters๏ฟผ)
Thanks to its huge inventory, Beijing can:
โข Maintain normal oil filtering operations
โข Reduce oil purchases on the international market
โข Resale of contracted shipments
โข Support to cool down global oil prices
๐ China is reselling oil to Europe and Asia
Many Chinese state-owned oil companies are said to have resold crude oil cargoes to customers in Europe and Asia.
This move shows:
โข Domestic inventory is still abundant
โข The need for additional purchases is not urgent
โข China proactively optimizes costs
โข The market receives additional supply immediately
๐ Impact on the world oil market
Impact Factor
China reduces purchases, reduces demand pressure
Resell cargo Instantly increase supply
Large inventory Creates a buffer zone for the market
Oil prices are less shocking
๐ China has become a global "regulating valve".
In the context of supply pressure from the Middle East and the Strait of Hormuz, China is acting as a shock absorber for the oil market.
Instead of competing to buy, the country uses its huge reserves to absorb the shock, thereby helping to stabilize global energy prices.
๐ Conclusion
China's 3.5 million barrel/day reduction is one of the most important factors rebalancing the world oil market.
When the largest oil importing country on the planet proactively reduces purchases and even resells goods, the pressure to increase oil prices is significantly reduced, bringing stability to the entire global economy.
๐ฟ๐ค Sometimes, the factor that determines oil prices lies not in the place of exploitation, but in China's huge reserves. ๐๐๐
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