Beijing helped 'cushion the impact' of Middle East oil disruption
China’s massive oil reserves and diversified energy mix have helped soften the Iran war’s global economic impact, European Central Bank (ECB) economists have said.
In a blog post published on Monday, ECB analysts said that Beijing’s “substantial stockpiling” of crude, shift to electric vehicles, and reduced petrochemical consumption have contributed to the “comparatively muted” rise in oil and gas prices since the US-Israeli attack on Iran in late February.
The world’s second-largest economy’s crude inventories have risen from 92 days’ worth of imports in 2023 to 115 days earlier this year, the report noted. This has “helped to cushion the impact of supply losses” that far exceed the contraction in energy output following Russia’s invasion of Ukraine in 2022.
The Iran war has removed roughly 14 million barrels per day – 14% of global output – from the world’s oil supply, compared to just 1 million barrels per day, or 1% of global supply, following Russia’s invasion of Ukraine in 2022, the report noted.
