China Cut Oil Imports By 40% Amid Hormuz Crisis; Here’s How It Pulled It Off

Six months into the West Asia war, India has managed to avoid major supply disruptions despite the crisis in the Strait of Hormuz. But the disruption has come at a cost, with crude imports remaining elevated and refiners paying steep premiums.

China, however, has been relatively insulated. Despite losing access to an estimated 5-6 million barrels per day (bpd) of crude that normally moves through Hormuz, Beijing's advance planning, large oil reserves, rising domestic production and rapid adoption of electric vehicles have helped cushion the shock.

The approach has also helped contain global oil prices, shielding other Asian importers from a sharper price spike.

China's Oil Shock Absorber

China entered the crisis with a multi-layered energy security system built over years. Government reserves, commercial inventories and company stockpiles have allowed Beijing to reduce imports and draw on existing supplies rather than compete aggressively for expensive crude.

China's domestic crude production has also reached a record 4.3 million bpd, compared with India's roughly 550,000 bpd.

Beijing sharply reduced crude purchases in June, with imports falling 40% year-on-year to around 7 million bpd, according to Chinese customs data. Refinery utilisation also dropped below 60% as processing rates fell to Covid-era levels.

The strategy allowed China to avoid buying large quantities of crude at elevated prices. It had accumulated significant reserves in 2025, when Brent averaged around $69 a barrel, as well as during the pandemic when prices were substantially lower.

China now holds about 1.5 billion barrels in commercial inventories and nearly 300 million barrels in strategic reserves, providing more than 100 days of cover based on pre-war import levels, according to Energy Intelligence data.

EVs Cut China's Oil Dependence

China's energy buffer extends beyond crude storage. Electric vehicles are rapidly reducing its dependence on oil.

EVs accounted for 54% of new car sales in China during the first half of 2026. Energy analysts estimate that the country's EV fleet is already displacing oil consumption equivalent to around 1.35 million bpd—roughly a quarter of India's total oil demand.

India, by comparison, still relies on imports for around 90% of its crude requirements. Its EV penetration has crossed 10%, driven largely by electric two- and three-wheelers.

Pakistan's Solar Pivot

Pakistan offers another example of how alternative energy can reduce exposure to Hormuz disruptions.

The country imported nearly 34 GW of solar panels in recent years, much of them from China. Solar's share of Pakistan's electricity generation rose from 4% in 2021 to 14% in 2024, reducing reliance on expensive LNG for power generation.

Analysts estimate solar installations helped Pakistan avoid around $12 billion in oil and gas imports by early 2026.

India, meanwhile, is expanding rooftop solar through the ₹75,000-crore PM Surya Ghar scheme while maintaining safeguards against Chinese dumping.

For India, the crisis has underscored the importance of building reserves, expanding domestic production and accelerating the transition away from imported hydrocarbons.