China's Invisible Hand Is Rebalancing the Oil Market
What’s rebalancing the global oil market? A reduction in Chinese imports.
Photographer: Frederic J. Brown/AFP/Getty Images
Facing an unprecedented shortage, the oil market is pulling every available lever to rebalance supply and demand. Some are well known: bypassing the Strait of Hormuz using pipelines, releasing emergency stocks and allowing high prices to kill consumption. But there’s another force that’s equally important and largely unmentioned: China.
Quietly, Beijing has slashed its oil imports by about a quarter from prewar levels. The impact is clear: Unexpectedly, more crude is available to the wider market, reining in oil benchmarks close to the key $100-a-barrel level despite 60-plus days of conflict in the Persian Gulf. But the mechanics behind the import swing — crucial to assessing its sustainability — are far from clear.