When Iran shut down the Strait of Hormuz, experts warned that oil prices could hit $150 or $200 a barrel within a few weeks. The great mystery of the Iran war is why that hasn’t happened—why, nearly five months later, oil prices have scarcely surpassed $100, even as countries around the world have been forced to dip into their oil reserves. Now an explanation seems to be emerging: China.Before the war, China, by far the world’s largest oil importer, was buying more barrels than the entire European continent and almost twice as much as the second-largest importer, the United States. Then, weeks after the conflict broke out, the country abruptly slashed its oil purchases, eventually cutting them by half compared with prewar levels. That appears to be why global prices have risen so much less than experts predicted. The shift also poses mysteries of its own. No one outside China knows how exactly the country has managed to meet its energy needs while forgoing imports, nor why its leaders chose this course. And no one knows how long the situation can last.The predictions of catastrophe for the world’s oil system were based on simple supply and demand. The Strait of Hormuz saw the passage of 20 million barrels of oil a day, a fifth of the world’s total supply. Countries found ways to make up for some of that loss, including by releasing barrels from strategic stockpiles, but not enough to avoid a price shock. If demand stayed constant, buyers would be forced to try to outbid one another to secure the scarce remaining supplies.[Andrew Exum: The war is lost. Now fix what it broke.]But demand didn’t stay constant. The amount of oil that China stopped buying, about 5 million barrels a day, represented about a quarter of what was lost when the strait closed and is equivalent to the entirety of imports to India, the world’s third-largest importer. This significant and unexpected drop in Chinese demand freed up those barrels to go elsewhere, preventing the kind of shortage that might have led to truly catastrophic prices. “China was definitely the most important factor in keeping prices down,” Rory Johnston, an oil-markets analyst who writes the widely cited newsletter Commodity Context, told me. “And the thing is that nobody—and I mean nobody—saw it coming.”The most obvious way a country can reduce oil imports at this scale is by drastically lowering its energy consumption. There is no evidence that China has done so. Unlike during the coronavirus pandemic, when the country essentially shut down, most indicators of energy consumption, such as traffic congestion, have hardly budged. The reduction also can’t be explained by a shift to clean energy. China has been investing heavily in renewable energy and electric vehicles for decades, but its economy remains reliant on imported oil. Such a dramatic change would have required millions of Chinese consumers to suddenly switch to EVs virtually overnight. “It’s a genuine puzzle,” Erica Downs, a senior research scholar at Columbia University’s Center on Global Energy Policy who specializes in Chinese energy markets, told me. “We’re in one of those rare moments where even the experts are forced to rely on a whole lot of speculation.”Could China be secretly getting extra oil from Russia? Since 2022, the Kremlin has been shipping huge amounts of oil to China using a “shadow fleet” of tankers that hide their point of origin to avoid Western sanctions. But it’s one thing to try to obscure where a given shipment of oil comes from; it’s another to hide the physical barrels that show up on Chinese shores, which are carried by giant tankers and unloaded at major ports. If Russia—or anyone else—were sending millions of extra barrels to China, the world would know about it.A more realistic possibility is that China has been tapping into its immense oil reserves, which it has spent years accumulating in the case of a crisis. But the giant outdoor tanks where China keeps much of its known oil reserves have remained full since the war began. This fact has given rise to yet another theory: On top of its known reserves, perhaps China has been stashing oil, as well as refined diesel and gasoline, in secret facilities, which it is now using to keep its economy running. “I sometimes feel like I should put on a tinfoil hat when I start talking about this,” Johnston said. “We have almost no evidence of it. And yet, it’s really the only explanation that makes any sense.”Even if the secret-reserve theory turns out to be true, that still leaves the question of why China decided to cut off imports so thoroughly. Several energy experts told me that when a nation taps into its reserves, it typically coordinates with other countries to make sure that no one is shouldering too much of the burden. Then, once the price of oil falls, it starts replenishing the depleted stockpiles. China has done the opposite. It unilaterally and without warning chose to reduce its imports far more than any other country, even after the price of oil fell below the point at which China would have historically started buying again.[Rogé Karma: Oil prices might not go back to normal anytime soon]This has led some experts to speculate that China was seeking to build soft power by saving the world economy or trying to gain leverage over the United States. Others have suggested that Beijing saw the Strait of Hormuz crisis as an opportunity to show the world that it could successfully withstand an oil shock. Eighty percent of China’s oil imports arrive through the Strait of Malacca, a narrow waterway that could be cut off in the event of a conflict over Taiwan. This has long been considered a potentially decisive advantage for Taiwan and its Western allies. Perhaps Beijing wants to subtly warn the rest of the world that it could not be brought to its knees by an energy blockade. But if any of those geopolitics-focused hypotheses were true, then China would presumably have taken credit for its actions. Instead, its leaders have been completely silent.A final possibility is that China is propping up foreign economies to protect its manufacturing base. China’s economy relies on exporting huge amounts of cheap goods all over the world. If its biggest customers across Europe and Asia suddenly experienced a recession, the journalist Max Fisher recently argued, China could lose “half its export market and a bunch of its economy with it.” Providing an energy lifeline to the rest of the world might have been a necessary step to keep its own economy humming. This possibility, unlike the others, would explain China’s silence: Beijing likely wouldn’t want to loudly declare to the rest of the world that it has a vested economic interest in helping to cushion future oil shocks.Whatever China’s exact motivations, the country has demonstrated yet another source of power it can wield on the global stage. As long as the Iran war continues, China’s leverage over oil prices gives it the ability to inflict immense pain on American consumers, and really the entire world, at a moment’s notice. Even if China doesn’t choose to do so, the fact that it can might be enough to give the country even more sway over international affairs. “For the last 50-plus years, whenever there was an oil shock, the first thing the U.S. president did was call Riyadh to try to persuade the Saudis to help out,” Jason Bordoff, the founding director of Columbia’s Center on Global Energy Policy, told me. “Maybe the place everyone needs to call now is Beijing. That’s a very powerful position to be in.”