Brent crude prices have firmed as markets react to US military strikes on Iranian assets near Kharg Island, a key export hub where up to 90% of Iranian oil exports are typically loaded onto tankers [1]. The strikes, which occurred over the weekend, have heightened risks around the Strait of Hormuz and Red Sea shipping routes, raising concerns about a major supply shock for global energy markets [1]. Rabobank’s Ben Picton notes that disruptions to Red Sea shipping could close off the Saudi East-West pipeline, which is capable of redirecting 5-7 million barrels per day to offset an estimated 18-20 million barrels per day supply interruption [1]. Iranian officials have stated they would respond in kind to any attacks on their oil infrastructure [1].
Crude oil prices have surged past $100 a barrel, reaching near 4-year highs, as flows through the Strait of Hormuz have stalled for most countries since the Iran war began more than two weeks ago [2]. However, Iran has sent more than 11 million barrels of oil to China through the strait during that period [2]. U.S. President Donald Trump has called on China to help restore oil flows through the Strait of Hormuz, claiming China gets 90% of its oil through the waterway, though analysts estimate the figure is closer to 40-50% of seaborne imports and only 6.6% of China's total energy consumption [2].
China’s National Bureau of Statistics spokesperson Fu Linghui stated that China’s energy supply is "relatively strong" and forms a "relatively good" foundation for responding to external market volatility [2]. China’s domestic crude oil production rose by 1.9% year on year to 35.73 million metric tons in January-February [2]. As of January, Beijing held an estimated 1.2 billion barrels of onshore crude stockpiles, enough to meet demand for three to four months [2]. Analysts suggest that China’s substantial reserves and diversified import channels provide a buffer against short-term disruptions in the Strait of Hormuz, helping maintain market stability amid geopolitical tensions [2].
Technical analysis indicates resistance for crude oil prices near $110 a barrel, with support levels around $95 [2]. The ongoing conflict and uncertainty around Hormuz flows may continue to drive volatility in oil markets, and traders are advised to monitor developments related to the Iran war and diplomatic efforts between the U.S. and China, as these factors are likely to influence short-term price action and sentiment [2].
CONCLUSION
US strikes on Iranian oil infrastructure have elevated supply risks and pushed Brent crude prices to multi-year highs, with global markets closely watching developments around the Strait of Hormuz. Despite the volatility, China’s robust reserves and increased domestic production have helped mitigate immediate risks, supporting market stability. Continued geopolitical tensions and diplomatic negotiations are expected to drive further price volatility in the near term.