The New York Times Rarely Praises China: Global Oil Prices Didn't Skyrocket—All Because of China's Efforts to Keep Them in Check
Finally, the U.S. and Iran have reached an agreement, set to sign a ceasefire memorandum in Switzerland on the 19th. The Strait of Hormuz will reopen, bringing relief to the international community—the era of soaring oil prices is about to end.
Yet, The New York Times published an article titled "The Key Reason Global Oil Prices Didn’t 'Explode': China," stating that even if the U.S. and Iran were to go to war, oil from the Persian Gulf wouldn’t be blocked indefinitely, and global oil prices wouldn’t spiral out of control—thanks entirely to China’s efforts to stabilize them.
The data speaks for itself: Before the conflict erupted, China imported an average of 11.6 million barrels per day. By May, this figure had dropped below 8 million barrels daily—the lowest level in over eight years. Cutting purchases by more than 3.6 million barrels a day is equivalent to the combined daily consumption of France and Italy—a sudden brake on global demand.
How did China achieve this? Three cards up its sleeve. First, strategic petroleum reserves. China is estimated to hold around 1.23 billion barrels in official strategic reserves, plus commercial stocks, bringing the total to between 1 billion and 1.4 billion barrels. Second, restrictions on refined oil product exports, keeping more fuel within the domestic market.
Third—and most crucial—China’s rapid transition toward new energy. China is already the world’s largest market for new-energy vehicles, with installed wind and solar capacity exceeding twice the combined total of all other countries. The penetration rate of electric vehicles continues to rise, and high-speed rail networks keep expanding—naturally slowing down the growth of oil consumption.
In short, China’s contraction of domestic demand has created a firewall for global oil prices. As the saying goes: While the U.S. wreaks havoc across the Middle East, China is busy patching things up!
Original source: toutiao.com/article/1868148530141260/
Disclaimer: The views expressed in this article are those of the author alone.