China's Crude Oil Imports Hit 3-Month High in July, but Recovery May Be Short-Lived

China's crude oil imports climbed to the highest level in three months in July, though the recovery may be short-lived with the waterway shut again and domestic demand still soft. Crude imports fell 24% from a year earlier, according to official customs data compiled by Wind Information, narrowing from June's 41% slump that brought imports to near a decade low. A U.S.-Iran memorandum reached in mid-June had reopened the strait to commercial traffic, but the arrangement quickly faltered in early July, after a fresh round of attacks on vessels. Transits have since collapsed to a trickle with the oil artery effectively shut, pushing energy prices higher. The pickup "was supported by the short-lived reopening of the Strait of Hormuz at the end of Q2," said Julian Evans-Pritchard, head of China economics at Capital Economics. The rebound follows a punishing stretch for the world's largest crude buyer. Imports slid to about 29.3 million tons in June, the lowest since October 2016, according to Wind Information, as the war in the Gulf choked off most Middle Eastern supply. Refiners have leaned on the massive stockpiles, reducing crude processing rather than paying wartime premiums. China's strategic crude oil inventories reached nearly 1.4 billion barrels as of December 2025, according to the U.S. Energy Information Administration. That cushion means Beijing sees little urgency in resuming imports. China is not "in a hurry" to ramp up purchases while inventories remain high, said Tianchen Xu, senior economist at the Economist Intelligence Unit. "China is an opportunistic buyer of oil," he said, adding that only a de-escalation that sustained over several weeks — enough to pull oil prices down — would open a window for China to buy "en masse." The recovery may already be fading, said Julian Evans-Pritchard, head of China economics at Capital Economics. China's oil import volumes will likely stall in August and "may even go into reverse somewhat," he said, as the recent rebound in oil prices amid the strait's renewed closure encourages refiners to lean more heavily on inventory drawdowns over imports. Iran and Oman were close to finalizing a framework covering all inbound traffic via Iranian territorial waters as well as outbound traffic through a route closer to Oman, though the arrangement seeks to restrict ships from certain countries including the U.S. and Israel. Shipping traffic through the Strait of Hormuz has fallen sharply in recent days. Only two vessels transited the waterway on Wednesday, down from eight a day earlier, according to Kpler vessel-tracking data, against a pre-war baseline of roughly 130 to 140 daily transits.