Oil Prices High but Avoided Worst-Case; China Stockpiles Cited

Six months after President Donald Trump launched military action against Iran in late February, oil prices remain volatile but have not doubled as analysts initially feared. Energy experts had warned of a protracted conflict sending markets into a tailspin, yet the most dire projections have not materialized.

Chinese President Xi Jinping arrives in Washington next week for a state visit amid Republican pressure over high gasoline prices. Analysts argue China's energy strategy has provided a critical buffer to the global economy by reducing demand pressure.

“We've been free-riding off Beijing in a weird way. China's doing it because they understand that they're on the train that Trump is driving off a cliff.”

Beijing spent years building the world's largest strategic petroleum reserve, reaching roughly 1.4 billion barrels by the end of 2025 according to U.S. Energy Information Administration estimates. This stockpile allowed China, the world's second-largest oil consumer and Iran's top buyer, to slash crude imports after the U.S. and Israel began bombardment and Tehran effectively closed the Strait of Hormuz.

A domestic shift toward electric vehicles further reduced Chinese import needs. Rosemary Kelanic of Defense Priorities noted the U.S. has been "free-riding off Beijing in a weird way" because China acts to protect its own economy from global price shocks.

It remains unclear how much the leaders will discuss Iran during the visit. Trump has sought to preserve a fragile trade truce with Beijing and has been careful in public comments regarding differences over China's relationship with Tehran.