A leading theory suggests China is drawing down on non-visible, underground crude oil inventories to manage the current supply shock.

China has over one billion barrels of crude oil in storage across the country.

Chinese crude oil imports have fallen by approximately 50%, from a pre-war level of 12 million barrels per day to a current level of 6 million barrels per day.

Fuel price caps have shielded Chinese consumers from the global explosion in energy prices, with Beijing's retail gasoline prices rising only 30% versus a global doubling.

China has become a more effective emergency backstop and policy player in the global oil market than OPEC.

The process of clearing stranded ships from the Persian Gulf and restarting shut-in oil production will likely take months to complete after a deal is signed.

Global commercial oil inventories are being drawn down at the fastest pace of any crisis on record.

Between 13 to 15 million barrels per day of oil production has been shut in due to a lack of export capacity from the Persian Gulf.

If the Strait of Hormuz remains closed through the end of summer 2026, oil prices will likely rise to substantially higher levels, with an updated assumption of around $150 per barrel.