China is helping to cushion global oil prices below $100 — but analysts warn it won’t last

A rapid reduction in Chinese crude imports has helped stop oil from trading even higher since the outbreak of the U.S.-Iran war — but analysts warn that price rises will be needed as market balance is gradually restored. The Middle East conflict has entered its 100 th day — but fears of a $200-per-barrel spike have failed to materialize, despite global crude supplies tumbling 14% since hostilities began on Feb. 28. Market strategists say China is acting as a key pressure valve on energy markets, with Beijing's move to cut crude imports from 11.7 million barrels a day in February to just under 9 million a day by late May helping to ease the Strait of Hormuz supply shock. China's cut represents about 74% of the decline in global crude imports, a "disproportionate" share of the adjustment, according to J.P. Morgan analysts, who said this has helped prices remain "remarkably calm" four months into the conflict. However, Societe Generale warns that the market will ultimately require higher oil prices moving forward as global inventories are depleted and strategic reserves require rebuilding. In a note, SocGen commodity analysts said the 14% loss in global crude supply, largely driven by the closure of the Strait of Hormuz, has pushed prices about 30% higher. In contrast, the 1973 OPEC oil embargo cut off about 7% of supply — but sent prices soaring some 134%. Stock Chart Icon Stock chart icon Brent crude. …