Don't be misled; you can put aside your anxiety about the Strait of Hormuz.

Source: Chang’an Street Knowledge

Recently, the U.S. and Israel launched attacks on Iran, leading to the outbreak of war and causing excessive market concerns about the “throat effect” of the Strait of Hormuz. Some public opinion has fueled panic over “serious shortages in China’s oil supply.” Based on official data and objective analysis of the situation, this anxiety is unfounded. The recent attacks will not cause substantial short-term disruptions to China’s oil supply.

Therefore, the following recommendations are proposed: 1. Rationally assess the impact of geopolitical conflicts on energy security and avoid overreaction; 2. Continue to optimize the diversification of oil import sources to strengthen energy security; 3. Improve the energy reserve system to enhance risk response capabilities.

January 11, 2025, Strait of Hormuz. Photo source: Visual China

Ample Import Reserves

Building a “firewall” for short-term supply security

From import data, China’s recent oil imports have been steadily increasing, establishing a sufficient safety buffer in advance. According to data from the General Administration of Customs, in November and December 2025, and January-February 2026, China’s crude oil imports totaled 50.89, 55.97, and 118.83 million tons respectively, with year-on-year growth of 14.95%, 17.0%, and 16.0%. Over four months, total crude oil imports reached 226 million tons, about 31.14 million tons more than the same period last year, equivalent to about 18.3 days of national oil consumption.

Based on current domestic consumption levels, existing commercial reserves plus strategic petroleum reserves can meet over 90 days of national demand. Even if short-term import fluctuations occur, domestic production and living needs can be fully guaranteed. Recent stability in domestic refined oil prices and market supply also demonstrate supply resilience.

Shandong Dongying crude oil commercial storage project with a capacity of 5 million cubic meters. Photo source: China Petroleum & Chemical Corporation

Diversification of Import Sources

Significantly reducing dependence on the Strait of Hormuz

From the import structure, China’s reliance on oil from countries along the Strait of Hormuz has been steadily decreasing, and the actual impact of the “throat effect” has been significantly weakened.

According to data from the National Energy Administration, about 33% of China’s total oil imports come through the Strait of Hormuz, accounting for roughly 22% of total national consumption. Even in extreme scenarios where transportation through the Strait is completely interrupted, increasing imports from Russia, the Americas, Africa, and other non-Gulf countries, combined with domestic reserves, can fully compensate for the supply gap without causing widespread shortages.

In terms of substitution capacity, China has established a diversified and stable crude oil supply system, capable of hedging against the risk of disruption at the Strait of Hormuz.

According to the “2025 Domestic and International Oil and Gas Industry Development Report” by the National Energy Administration, Russia is China’s largest crude oil supplier, accounting for 26%. It can increase supply by 50 million tons per year via the Far East pipeline and shipping, covering 27% of the gap; Brazil, Canada, Colombia, and other American countries can add 25 million tons annually, covering 14%; Angola, Nigeria, Congo (Brazzaville), and other African countries can increase supply by 35 million tons annually, covering 19%; Kazakhstan and other Central Asian countries, Southeast Asia, and Australia can add 20 million tons annually, covering 11%.

These channels combined can supply an additional 130 million tons per year. Coupled with China’s potential to increase domestic crude production by 20 million tons annually and strategic reserve releases, the total substitution capacity reaches 180 million tons per year, roughly covering the 185 million tons of annual imports through the Strait of Hormuz. The remaining small gap can be smoothly absorbed through demand-side adjustments.

From the global supply perspective, the crude oil market is currently in a state of oversupply, with no substantial supply shortages.

According to OPEC+ data, the organization’s remaining spare capacity exceeds 3 million barrels per day (about 150 million tons per year), mainly in Saudi Arabia, the UAE, and other non-U.S. restricted producers. Non-OPEC countries like the U.S. and Canada have the potential to increase output by over 2 million barrels per day (about 100 million tons per year). The total idle capacity exceeds 250 million tons annually, fully capable of offsetting Iran’s reduced oil exports.

China’s diversification strategy for oil import sources has been in place for over ten years, with more than 40 source countries, continuously reducing dependence on any single region or channel. The so-called “throat theory” overestimates the actual risk impact.

Photo source: China Petroleum & Chemical Corporation

U.S. Strategic Dilemma

Deciding that the war will not escalate long-term

From the external situation, the U.S.’s economic capacity and political constraints determine that it will not escalate the attack into a long-term quagmire like Ukraine.

First, the U.S. economy cannot withstand prolonged high oil prices. Currently, U.S. core inflation (Core PCE) has risen to 3.0% (from 2.8%), and domestic gasoline prices have surged 20% since the Iran attack. A prolonged conflict could keep oil prices above $100 per barrel, pushing U.S. inflation higher and forcing the Federal Reserve to reduce or even halt interest rate cuts in 2026. This would severely impact the U.S. housing market, stock market, and debt sustainability, contrary to U.S. economic interests. According to U.S. Commerce Department estimates, every $10 increase in oil prices would reduce U.S. GDP growth by 0.3 percentage points and raise inflation by 0.4 percentage points.

Second, 2026 is an election year in the U.S., and the core goal of the Trump administration is to maintain control of Congress. A long-term war or significant U.S. casualties would severely affect voter support. Therefore, the U.S. prefers a strategy of “limited strikes and quick resolution” to avoid prolonged conflict.

On March 15, in West Palm Beach, Florida, Trump was interviewed by reporters aboard Air Force One. Photo source: Visual China

Third, the international community broadly opposes escalation of the war. China, Russia, the EU, and other major economies have called for an immediate ceasefire and the restoration of safe navigation through the Strait of Hormuz. The UN Security Council is discussing a ceasefire resolution. Stabilizing the global energy market aligns with the common interests of all countries, and a long-term blockade of the Strait of Hormuz is unlikely.

In summary, the current “Hormuz anxiety” in the market is essentially an overreaction driven by short-term emotions. It does not reflect China’s actual oil security capacity nor the objective trend of war development. We should maintain strategic resolve, advance energy transition and diversification as planned, and not be misled by the narrow “throat theory.”

After all, China’s energy security has never depended solely on the smooth passage of a single strait but is built on a diversified supply system, ample strategic reserves, and strong domestic production capacity.

Author: Yi Yingnan, Researcher at Renmin University of China Chongyang Financial Research Institute