Beijing formally welcomed the US-Iran peace deal announced over the weekend, hoping the reopening of the Strait of Hormuz will ease a months-long oil supply disruption that has rattled China’s fuel markets and hit its refining sector.
However, the unofficial response, from the Chinese commentary, is not so positive.
Chinese commentators say with approval that the reopening of the Strait of Hormuz should allow Beijing to replenish its strategic crude reserves and benefit from softening oil prices, with some sanctioned “teapot” refiners likely to find relief in the diplomatic thaw.
However, with Western governments freezing Iranian assets and allowing Tehran to legally sell crude, China will lose the discounts it enjoyed by importing Iranian oil through a shadow fleet that circumvented sanctions.
“International oil prices are likely to fall after the US-Iran reconciliation, which is a double-edged sword for China,” a Sichuan-based columnist using the pseudonym Fanyuzhi. says. “In the short term, lower oil prices will lower logistics costs and ease inflation. But in the long term, cheap oil will slow the push for new energy and China will lose the privileged position it built with Iran during the years of sanctions.”
He says that once Tehran reopens to the world, European, Japanese and South Korean companies will rush back to compete for the crude oil that China once had for itself.
“That said, a more stable Middle East is good for China’s Belt and Road Initiative (BRI),” he says. “Beijing helped broker the Saudi-Iranian reconciliation and played a behind-the-scenes role in the US-Iran talks as well. China’s influence in the region is clearly growing, and Middle Eastern countries will increasingly look east when weighing their relations with major powers.”
But he cautions against putting too much faith in the peace deal – saying it resembles two exhausted boxers catching their breath after the referee makes a stoppage, with another round possible after their power returns.
Since the US-Iran war broke out on February 28, it has strained China’s gasoline supply on two fronts, according to media reports. Disruptions to crude oil flows through the Strait of Hormuz raised global oil price expectations, squeezing margins for Chinese refiners.
At the same time, as fuel prices remained volatile, many Chinese consumers turned to electric vehicles, eroding domestic demand for gasoline and putting the country’s independent refiners under increasing pressure to cut output.
WHEREAS US sanctions in some teapot processors the pressure was added, the impact was less severe than expected. China’s large strategic crude oil reserves gave Beijing room to maintain domestic fuel supplies without relying on sanctioned imports.
China’s crude oil imports fell 20% year-on-year in April to 9.25 million barrels per day, the lowest level since July 2022, according to customs data. The decline deepened in May, when imports fell to about 7.8 million barrels per day, down 29% year-on-year.
For the first five months of 2026, total crude oil imports fell 4.8% from the same period last year. Refined fuel imports fell even more, with May figures down 58% from a year earlier.
“When crude oil shipments through the Strait of Hormuz were first cut off in March, Chinese authorities ordered independent refiners to maintain high production of gasoline and oil even at a loss, warning that the cut in usage rates could result in a reduction in their crude import quotas.” says a Beijing-based writer who uses the pen name All About Energy.
He says some of the loss-making refiners were allowed to cut production only after Beijing saw a slowdown in domestic demand for gasoline.
“China’s demand for gasoline has been declining since the war in Iran cut off crude oil shipments through the Strait of Hormuz,” he says. “Rising fuel prices have discouraged driving vehicles with combustion engines, especially in cities where electric vehicles are more convenient and cheaper to use. The decline in gasoline demand this year is expected to exceed previous forecasts.”
“April 2026 was a turning point,” says Xie Duiren, a columnist based in Shandong. “New energy vehicles accounted for more than 60% of domestic car retail sales for the first time, with domestic brands exceeding 80%. As more people choose electric vehicles, combustion engine cars lose their residual value protection in the used market.”
He says fewer buyers and more sellers means used car prices can only go one way, and the downward spiral has begun.
“Electric vehicles are now improving in technology and holding their value better, constantly squeezing out used combustion engine cars,” he says. “When a combustion engine car goes from an asset to a liability, who would still want to own one?”
Reuters reported on June 2, China’s National Development and Reform Commission (NDRC) allowed some independent refiners in Shandong province to cut output from June to no lower than 80% of last year’s monthly average.
US presence in the Indo-Pacific
Washington has gained significant influence over the global energy market through two major developments this year.
In January, US special forces arrested Venezuelan President Nicolas Maduro in Caracas and took him to New York to face charges of drug trafficking and narco-terrorism. Trump said the US would rule Venezuela for an indefinite period, giving Washington significant leverage over the country’s vast crude oil reserves. The end of the Iran war further widens that reach, with the Strait of Hormuz set to reopen under conditions heavily shaped by Washington.
Together, the two developments give the Trump administration much greater bargaining power in the global fossil fuel market and leave it more bandwidth to focus on the Indo-Pacific, both politically and militarily, some Chinese analysts say.
“While global attention was fixed on negotiations with Iran, reports emerged that the Trump administration was considering the purchase of the Chagos Islands in the Indian Ocean from Mauritius, bypassing the United Kingdom to secure direct control of the Diego Garcia naval base,” writes a military affairs commentator in one. ITEM at Sina.com. “Diego Garcia forms the southwestern anchor of Washington’s Indo-Pacific strategy, working together with the island chain system and India to form a multi-layered encirclement of China’s sea lanes.”
He points out that the base, which hosts about 2,400 military and civilian personnel and supports strategic bombers and naval operations, has served as a critical logistics hub for US operations across the Indo-Pacific for decades, most recently during the Iran war.
He says China must remain vigilant and watch every move Washington makes now that the war in Iran is drawing to a close.
The official answer in more detail
Chinese Foreign Ministry spokesman Lin Jian said On Monday, Beijing welcomed the agreement between the US and Iran on the first phase memorandum of understanding (MOU) and appreciated Pakistan’s mediation efforts. He called on both sides to sign it as scheduled on June 19 and said China is willing to work with the international community to help restore peace in the Middle East and the Gulf region.
“The Strait of Hormuz is an important strait for international navigation. Restoring stability in the strait serves the common interests of countries in the region and the international community,” Lin said. “We hope that the strait will become safe for free passage again at an early date. China is willing to maintain communication with countries in the region and the international community on relevant issues.”
US President Donald Trump DESIGNATED The deal followed more than 100 days of military conflict with Iran, saying the deal with Tehran was “now complete” and authorizing the immediate lifting of the US naval blockade. Pakistan and Qatar brokered the talks and the official signing ceremony is scheduled to take place in Geneva on June 19.
The 14-point Memorandum of Understanding includes a permanent cessation of hostilities on all fronts, including Lebanon, the complete lifting of the naval blockade within 30 days, the reopening of the Strait of Hormuz and the suspension of sanctions on Iranian oil sales. It also calls for the release of $24 billion in frozen Iranian assets during a 60-day negotiation period, after which a final deal on nuclear issues will be reached.
Read: Trump-Xi summit to weigh on US energy sales amid Hormuz crisis
Follow Jeff Pao at X at @jeffpao3
