Lower prices for July and August cargoes could encourage refiners. A prolonged slump in China's crude buying might be nearing an end, removing a key cushion for the global oil market just as renewed U.S.-Iran tensions put Gulf supplies at risk once again.

Chinese refiners largely stepped back from the market during the Iran war, leaving more barrels available for Europe and other Asian buyers at a time when traders were grappling with one of the worst supply shocks in modern history. The world's top crude importer was able to cut purchases because it had built up large inventories before the conflict.

The U.S. Energy Information Administration estimates China added an average of 1.1 million barrels a day to strategic reserves in 2025, pushing stockpiles to nearly 1.4 billion barrels by the end of the year. Crude imports plunged more than 40% in June from a year earlier, according to official data.

The International Energy Agency estimates China drew down about 41 million barrels from crude stocks last month, allowing refiners to meet domestic demand without aggressively competing for cargoes.