Oil markets are facing renewed uncertainty as conflict in the Middle East disrupts one of the world's most important energy routes.
But China, the world's largest crude oil importer, has some significant buffers that could help it cope with the shock, Commonwealth Bank Head of Commodities and Sustainable Economics Vivek Dhar said.
Brent oil futures remained below $US90 a barrel on 17 August despite heightened tensions and uncertainty about flows through the Strait of Hormuz.
Dhar says China's ability to reduce imports is one reason the oil market may be able to withstand more disruption than headline numbers suggest.
1. China began building its oil stockpile well before the war
China has been importing considerably more crude oil than it needs for immediate consumption.
CommBank reports China's crude oil stockpiles have been increasing since October 2024, meaning some of its unusually high imports have been going into inventories.
That gives China room to cut purchases from overseas while continuing to meet domestic demand.
CommBank estimates China could sustainably reduce crude imports by around 2.5 million to 3 million barrels a day while keeping its inventories broadly flat.
In the shorter term, China may have even more flexibility. Ship-tracking data suggests it has at times cut seaborne imports by around 4 million to 5 million barrels a day, drawing on inventories instead.
That stockpile gives China a significant cushion if Middle East oil supplies remain constrained.
2. EVs are reducing China's need for oil
China's underlying demand for oil has also weakened.
The International Energy Agency estimates electric vehicles displaced more than 1.5 million barrels a day of Chinese road fuel use in the second quarter of 2026, up from around 600,000 barrels a day a year earlier.
This means that China could import around 900,000 barrels a day less between the second quarters of 2025 and 2026 and still meet its road fuel demand.
So China's dependence on additional imported crude is not growing as quickly as its headline import numbers might suggest.
Dhar says China's rapid increase in crude stockpiles means its high import rates over the past year were inflated by inventory building.
That gives the country more scope to respond to a supply shock by reducing imports rather than immediately competing for scarce barrels on the global market.
3. Hormuz doesn't need to return fully to normal
The Strait of Hormuz normally carries around 20 million barrels of oil a day, making disruption to the waterway a major risk for global energy markets.
But CommBank estimates flows through the Strait may only need to recover to around 50-60% of pre-war levels before concerns begin shifting from undersupply towards oversupply.
Several other buffers are helping compensate for lower flows of ship-borne oil through the region.
Pipelines that bypass the Strait can carry around 5 million barrels a day, China could structurally reduce its imports by around 2.5 million to 3 million barrels a day, and non-OPEC+ oil supply outside the Middle East is also increasing.
US Energy Secretary Chris Wright recently put seven-day average oil flows through Hormuz at around 9 million barrels a day, or roughly 45% of pre-war levels, according to the note.
That means the market may already be closer to the level required to restore balance than the scale of the disruption suggests.
"With more oil potentially flowing through the Strait of Hormuz than expected, combined with China's ability to reduce imports sizably in the short term, Brent oil futures have good reason to stay below $US90 a barrel," Dhar said.
The outlook still depends heavily on how long disruption lasts and how far China is willing to draw down its inventories.
But for now, its stockpiles, weaker oil demand and ability to sharply reduce imports give China some significant protection from the Middle East oil shock.
