Since the Strait of Hormuz closure on February 28 knocked roughly 14% out of global crude supply, the oil market has been held together by one unlikely buffer: China buying less.

That story hasn't changed. But it's getting more complicated by the day.

The Numbers Behind Oil's Stability

China cut crude imports from 11.7 million barrels a day in February to just under 9 million barrels a day by late May, according to CNBC. That's a reduction of nearly 3 million barrels per day.

J.P. Morgan analysts called China's share of the global demand adjustment "disproportionate" — roughly 74% of the total decline in global crude imports. Without it, the Hormuz supply shock would have hit markets far harder.

For context: the 1973 OPEC embargo cut 7% of global supply and sent prices up 134%, according to Societe Generale analysts led by Mike Haigh, head of FIC and commodity research. The current conflict has cut 14% of supply — twice as much — yet prices are up roughly 30%. Brent is trading around $94 as of this morning.

SocGen credits the difference to a combination of strategic petroleum reserve releases from the U.S., Europe, and Japan; Saudi Arabia rerouting flows away from the Strait; and increased output from Brazil and Venezuela. But China's import cuts were, in SocGen's words, "one of the largest offsets to the shock, second only to Saudi rerouting."

LNG and Refinery Delays

China's LNG imports have climbed to their highest level since the war began, according to OilPrice.com. Beijing isn't cutting energy consumption broadly. It's substituting. Less crude oil in, more liquefied natural gas in.

Simultaneously, Beijing has delayed 500,000 barrels per day of planned refining capacity, according to OilPrice.com. That's roughly the daily output of a mid-sized OPEC producer sitting on the sidelines.

Delaying refinery buildout while ramping LNG imports means China is structurally restructuring its energy mix in real time — burning more gas, processing less crude. China's crude demand suppression may not be a temporary wartime measure. Some of it could stick.

The Saudi Move

Saudi Arabia has slashed oil prices again in response to weakening Asian demand, according to OilPrice.com. Riyadh cutting its official selling prices to Asian buyers is a direct admission: Chinese and regional demand isn't snapping back the way optimists hoped.

Separately, Iranian crude prices have also been cut due to weak Chinese demand, according to OilPrice.com. Iran is discounting to keep Chinese buyers interested — which means the oil market has two major producers in a price war for a customer who is deliberately buying less.

SocGen's Warning

SocGen explicitly warned that higher prices are coming as global inventories deplete and strategic reserves need to be rebuilt. SPR releases are a one-time buffer. You can't drain the strategic reserve indefinitely.

Then Sunday happened. Israel and Iran exchanged strikes again — the conflict's 100th day — pushing oil higher, according to CNBC. Every military escalation is a reminder that the Hormuz situation can get dramatically worse before it gets better.

Rory Green, head of emerging markets macro at a firm cited by CNBC, flagged renewed tensions as a direct upside price risk. The "reassuring signals from Washington" that SocGen credited for keeping markets calm are only as durable as whatever diplomatic thread is currently holding.

The Framing Problem

Most coverage frames China's import cuts as Beijing "helping" the global economy.

China isn't being altruistic. Beijing is protecting itself from a supply shock it can't control. The refinery delays and LNG pivot are China adapting its energy infrastructure — with a side effect of giving the rest of the world a temporary price break.

The moment China decides its strategic inventories need replenishing, or its economy accelerates and it needs more crude, those 3 million barrels per day of demand come roaring back into a market where Hormuz is still disrupted and SPR stocks have been drawn down.

SocGen's Haigh put it plainly: the market will require higher prices as balance is restored. That's the consensus among commodity analysts.

What This Means

Gas prices haven't spiked to $8 or $10 per gallon. Credit China's demand pullback, Saudi rerouting, and the coordinated SPR draw.

But every one of those buffers is finite. When they run out — and they will — prices will reset higher. The only question is whether the conflict ends before the buffers do.

Right now, nobody knows.