China is likely to return to buying large volumes of oil within weeks after selling down inventories during the peak of the Iran supply disruption, according to Mercuria.
Marco Dunand, chief executive of the trading house, said at the FT Commodities Summit that China has been drawing from commercial stocks accumulated ahead of the crisis, effectively stepping back from the market as prices surged and Middle East flows tightened.
That sell-off is a critical and possibly underappreciated part of the recent balance. China entered 2026 with a sizable buffer after stockpiling heavily through 2025, when it was estimated to have added roughly 1 million barrels per day to storage while prices hovered near $60.
Import data shows that those barrels are now being used.
China’s crude imports fell 2.3% year-on-year in March to 49.98 million tons, even as first-quarter volumes remained up 8.9% on earlier stockpiling. LNG imports also dropped sharply, down 22% in March, as buyers pulled back at higher prices.
China has not been a consistent buyer during the disruption. It has been a source of supply, offsetting part of the loss from the Middle East by releasing stored crude into the system.
But that is nearing an end. Once inventories are drawn down to operational levels, China will need to return to the market to maintain refinery runs. Dunand put that timeline at roughly three weeks.
When that happens, the balance shifts again. China is the world’s largest crude importer, and its return as a large-scale buyer would add demand back into a market already dealing with constrained supply and elevated prices.
There is no visibility into China’s actual stock levels, but the direction is clear. The buffer built in 2025 is being used in 2026. Once it is no longer sufficient, imports will rise.
By Julianne Geiger for Oilprice.com
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