Shandong’s commercial reserves have hit an eight-month low of approximately 360 million barrels, according to Energy Aspects data. This depletion marks the sharpest monthly drop since 2016, ending a period where refiners relied on a massive 1.3-billion-barrel national cushion to navigate high global prices and an unofficial government push to curb imports.

The shift toward Iranian supplies is timed to capitalize on a window of increased tanker traffic. Millions of barrels of Iranian crude cleared the Strait of Hormuz between mid-June and early July, taking advantage of a temporary easing in U.S. export enforcement. With Chinese crude imports already rebounding by 22% in July to 8.45 million barrels per day, the return of these independent buyers to the international market threatens to tighten global supply. Analysts suggest this renewed demand could pressure oil prices, potentially ending the cooling effect China’s previous import pause had on global benchmarks during the ongoing Middle East conflict.