The article discusses the current state of oil prices amid the ongoing conflict in Iran and its impact on global energy markets. Analysts had initially predicted a surge in oil prices above $200 per barrel, but prices have remained stable around $94 due to a significant decrease in China's oil imports, which have dropped from 11 million barrels per day to 7.8 million. This decline, attributed to China's strategic use of its oil reserves and careful management, constitutes 74% of the global reduction in crude oil trade. Although lower oil prices are currently benefiting the market, uncertainties loom regarding how long China can maintain this stability, especially if they need to draw on reserves more heavily. The article emphasizes the importance of global supply dynamics and potential future pressures on oil prices.

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Energy Oil

Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer

Sasha Rogelberg

By Sasha Rogelberg Sasha Rogelberg

Reporter Down Arrow Button Icon

Sasha Rogelberg

By Sasha Rogelberg Sasha Rogelberg

Reporter Down Arrow Button Icon

June 10, 2026, 2:10 PM ET

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A man guides a ship in the water.

China has cut back on oil imports, helping keep energy costs low, even as the Strait of Hormuz remains effectively closed.Majid Saeedi—Getty Images

In the early days of the Iran war, analysts held the grim prediction that crude oil prices would top $200 a barrel, nearly triple pre-war prices. But more than three months into the conflict, their fears have not materialized, and analysts have China’s trade activity to thank for it.

How long can China cushion energy costs?

China’s ability to help keep oil prices lower may be limited, however.

Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies noted in a recent report that Chinese stakeholders appeared to correctly guess how much apply they need to maintain economic operations.

China may have learned this lesson the hard way. In late 2021, the country saw an energy crisis as a result of a global coal shortage. Chinese power companies lost money not only because of high prices, but also because the Chinese government capped how much they were able to charge consumers for electricity. As a result, power plants shut down, and China suffered severe power outages.

China has since poured investments into electrification, as well as oil and coal reserves, but Meidan questioned how and when Chinese stakeholders will make decisions on managing the country’s strategic oil reserves.

“How low could imports (and refinery runs) go before China must tap into its stocks more meaningfully or resume crude buying even at higher costs?” Meidan said in the report. “What does this mean for product supplies and to what extent can coal-to-chemicals offset the loss of oil-based chemicals? And what is driving these decisions?”

There are also other variables counterbalancing rising energy prices, Societe Generale noted, including an apparent willingness for the U.S. to continue to export oil, as well as evidence the Strait of Hormuz is actually allowing greater passage to shipping vessels than initially estimated. But regarding these exceptions, the analysts warned, energy costs will not remain depressed should the conflict continue.

“The market will require higher prices to restore balance,” Haigh wrote. “Several structural pressures are pointing in the same direction: strategic reserves will need to be rebuilt, inventories are unlikely to remain comfortable without incremental supply, and new production requires stronger returns to move forward.”

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By Sasha RogelbergReporter

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Sasha Rogelberg is a reporter and former editorial fellow on the news desk at Fortune, covering retail and the intersection of business and popular culture.

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