China's Crude Oil Imports Hit 3-Month High... 'Hormuz Re-blockade to Reverse Recovery' Warning

▲ China, Crude Oil, Strait of Hormuz/AI Generated Image

China's crude oil imports hit a three-month high. However, with the Strait of Hormuz blocked again, the recovery is unlikely to last long.

According to CNBC on August 7 (local time), official data from Chinese customs compiled by Wind Information shows that crude oil imports in July decreased by 24% year-on-year, a narrower decline than the 41% plunge in June. June imports were close to their lowest level in a decade.

Commercial shipping in the Strait of Hormuz resumed following a memorandum of understanding between the U.S. and Iran in mid-June, but the agreement quickly began to falter in early July with new attacks on ships. Since then, transit volumes have plummeted to virtually rock-bottom levels, effectively blocking the crude oil transport route and leading to rising energy prices. Julian Evans-Pritchard, head of China economics at Capital Economics, said the rebound was "driven by the brief reopening of the Strait of Hormuz at the end of the second quarter."

The rebound comes after a challenging period for China, the world's largest crude oil buyer. According to Wind Information, with most Middle Eastern crude oil supplies blocked due to the war in the Gulf region, June imports fell to about 29.3 million tons, the lowest since October 2016. Refiners have been reducing crude oil processing by relying on large strategic reserves rather than paying war premiums. According to the U.S. Energy Information Administration, China's strategic crude oil reserves amounted to approximately 1.4 billion barrels as of December 2025.

Thanks to this buffer, Beijing does not feel a strong need to rush to resume imports. Tianchen Xu, a senior economist at the Economist Intelligence Unit, said that with reserves still ample, China is "not in a hurry" to increase purchases. He added that "China is an opportunistic crude oil buyer," and that only a sustained de-escalation of tensions over several weeks, enough to push down oil prices, would create room for China to buy "in large quantities."

Evans-Pritchard said the rebound may already be losing momentum. He stated that due to the recent re-blockade of the Strait of Hormuz and the resulting rebound in oil prices, refiners are relying more heavily on depleting strategic reserves than on imports, and China's crude oil imports in August could stagnate or "even partially retreat." Iran and Oman have nearly finalized a framework covering all inbound transit through Iranian territorial waters and outbound transit via routes close to Oman, but this agreement seeks to restrict transit for vessels from certain countries, including the United States and Israel. According to Kpler's vessel tracking data, ship traffic through the Strait of Hormuz has sharply decreased in recent days. On Wednesday, only two vessels passed through the waterway, down from eight the previous day, a significant contraction compared to the pre-war average of 130-140 vessels per day.

[Article Summary]

-China's crude oil imports in July decreased by 24% year-on-year, reaching a three-month high, but the recovery is faltering as the Strait of Hormuz is blocked again.

-China's strategic crude oil reserves amount to approximately 1.4 billion barrels, so Beijing is not rushing to resume imports.

-Traffic through the Strait of Hormuz has sharply decreased from 130-140 vessels per day before the war to just 2 recently.

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