The West Asia war and the consequent closure of the Strait of Hormuz have constricted crude oil flows and sent prices spiralling, particularly for Asian economies such as India.The situation, however, could have been much worse for large Asian energy importers had it not been for one country — China.Beijing is the world’s largest crude oil importer, but has sharply reduced its imports of the commodity amid the West Asia crisis.This has freed up supplies from regions unaffected by the strait’s closure — Russia, West Africa, the Atlantic Basin, and non-Hormuz-dependent West Asian nations — and allowed the likes of India, South Korea, Japan, Thailand and Singapore to snap them up.This is what has blunted the oil shock and prevented a deeper supply crunch and even higher prices in the region — at least so far.Meanwhile, US President Donald Trump has said that he is looking to make a “final determination” on moving forward with a deal to extend the Iran ceasefire and reopen the Strait of Hormuz. Iran, however, says no deal has not been finalised yetSo why has China cut down on its oil imports? And, more importantly, how long can it hold back if the crisis persists over the long run? We explain.Story continues below this adWest Asia war’s impact on the oil marketThe West Asia war, which the US and Israel began on February 28 with strikes on Iran, has led to Tehran halting vessel movements through the critical maritime chokepoint of the Strait of Hormuz.The narrow waterway between Iran and Oman normally accounts for a fifth of global crude oil flows, with a vast majority of that oil going to Asian buyers. The supply through the strait has now been reduced to a trickle.Before the war, 40-50% of India’s oil imports came via the strait. India is the world’s third-largest consumer of crude oil with an import dependency level of more than 88%. So why did China cut oil imports?“Chinese crude imports in May month-to-date are tracking around 6.6 mbd (million barrels a day), the lowest level since 2016. Compared with last year’s average, imports from Russia, Africa, and parts of the Americas have declined materially, effectively freeing additional barrels into the broader Asian market,” Sumit Ritolia, manager, modelling & refining at commodity market analytics firm Kpler said in a recent note.Story continues below this adAlso Read | Petrol, diesel prices up by over Rs 7 a litre since May 15; OMCs’ losses down, but still at about Rs 600 crore/dayChina’s refinery crude intake has dropped to around 13.5 mbd in May — down 1.92 mbd versus the 2025 average — but the decline in oil demand continues to trail the drop in supplies. This means that China has been drawing on its huge onshore oil inventories. Preliminary data corroborates that trend.Apart from its massive oil inventory and strategic crude petroleum reserves, Beijing’s current reluctance to import oil at normal levels is partly because high fuel prices and tepid economic activity have dampened oil demand, while accelerating the energy transition in the country.“…refiners across South Korea, Japan, Southeast Asia, and India have been able to secure more crude supply than initially expected, allowing refinery throughput to hold up materially better than earlier base-case assumptions despite tighter Middle Eastern flows and Strait of Hormuz disruptions. This has helped Asia (ex-China) refinery runs recover more strongly than initially expected in May, although overall refining activity remains heavily disrupted versus normal conditions,” Ritolia said.How China’s reduced imports have helped IndiaIndia’s crude imports in May have been strong. While the 2025 average stood at around 4.8 mbd, May imports are currently tracking around 5 mbd, potentially the highest monthly import in May ever, supported primarily by stronger Russian and Venezuelan crude imports, as per Kpler data.Story continues below this adIndustry experts and analysts are of the view that oil prices would have been a lot higher had China maintained its crude import levels.“Physical crude oil benchmarks appear to have settled into a $100-$120/bbl (barrel) range over the past two months, after the initial wave of panic buying during the first month of the US-Iran war briefly pushed prices above $150/bbl. Beyond SPR (strategic petroleum reserve) releases by multiple countries—particularly the accelerated drawdown in US stockpiles—one key reason oil prices have not sustainably moved above $150/bbl despite a structural supply loss of 8 mbd from the Middle East is the absence of Chinese buying in the market,” said Muyu Xu, senior crude oil analyst at Kpler.Also Read | West Asia war impact on oil market worse than earlier anticipated: What’s the worry for India?Given its high oil consumption and import dependency, India is already bearing the brunt of high oil prices. The country imports 1.8-2 billion barrels of oil a year, and every $1-per-barrel increase in price bumps up its oil import bill by up to $2 billion on an annualised basis. According to a March report by Nomura, India is among the three Asian economies most vulnerable to high oil prices, the other two being Thailand and South Korea. Story continues below this adIt also said that every 10% oil price increase typically widens India’s current account deficit by 0.4% of the GDP. Crude oil alone is the country’s largest merchandise import. According to Commerce Ministry data, crude oil imports in 2025-26 stood at about $135 billion. If oil prices sustain at $100 per barrel in the current financial year and import volumes don’t decline, the oil import bill could be upwards of $200 billion for the year. If the price sustains at a much higher level, the implications would be even graver.WIll China continue to hold back in the coming months?China’s oil imports will continue to be a critical variable for India and other major Asian refiners in the foreseeable future. If Beijing’s imports remain subdued, other Asian refiners are expected to continue benefiting from relatively improved oil availability. But any significant recovery in oil imports by China could rapidly tighten oil supply in Asia — unless the Strait of Hormuz disruption is resolved. While Trump has signalled a deal to extend the ceasefire, it is still unclear what a longer-term solution will be.Story continues below this adThe current pattern is expected to persist in the near term, as refiners continue to keep run rates low while staying on the sidelines of the physical crude market. According to Xu, Chinese state-owned refiners are heard to be planning to keep June and July refinery run rates largely unchanged, even as fuel demand typically starts to pick up during the summer season. NewsletterFollow our daily newsletter so you never miss anything important. On Wednesday, we answer readers' questions.SubscribeChina’s independent refiners have also cut back significantly on buying oil from the spot market amid a surge in Russian and Iranian oil prices, which formed a large part of these refiners’ crude slate.“That said, if the US were to maintain the blockade on Iranian cargoes, Chinese independent refiners would have to turn to alternative supplies—most likely Russian crude—and compete for barrels currently taken by other buyers such as India. Given elevated prices, they are more likely to further cut run rates,” Xu said.This means that there could be further oil inventory drawdowns in China, which may prompt Beijing to release state oil reserves, or even step up crude buying. Ultimately, unless oil flows through the Strait of Hormuz normalise, China will have to take a call on when to step up oil imports. And that is when the real oil shock would be visible.Story continues below this ad“To borrow a quote commonly attributed to Napoleon, ‘Let China sleep, for when she wakes, she will shake the world,’ the same may hold true in today’s oil market,” Xu said.“Once China decides to return to the market — likely affecting July onward-loading cargoes — the (global oil market) balance could quickly shift from ‘tight’ to ‘significantly tighter’, especially as European and American refiners ramp up operations to meet peak summer demand amid low fuel inventories.” This could push oil prices up to “levels many had deemed inevitable at the outset of the war”.