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Market Chatter: China's Reduced Oil Imports Cap Global Prices Despite Strait of Hormuz Closure, Analysts Say

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China's reduction of oil imports, which led to lower Asian crude purchases, has kept crude prices from soaring despite the lingering effects of the Iran war, including the continued closure of the Strait of Hormuz, Reuters reported Thursday.

While market analysts initially projected crude prices to exceed $160 per barrel due to the conflict, prices have instead stabilized around $110 per barrel, despite a lack of progress in peace talks, the report said, citing Morgan Stanley analysts.

Chinese net seaborne crude imports slid by 5.5 million barrels per day, equivalent to 5.5% of global demand, to 8.5 million barrels per day in the month through May 8, Reuters said, citing Morgan Stanley.

China even resold oil cargoes purchased under long-term contracts to refiners outside the country as domestic demand weakened and crude prices rose, Reuters said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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