Making Room Is a Contribution: The Global Public Benefits of China's Energy Strategy

In a report dated September 19, 2026, by The Associated Press, the backgrounds of two experts interviewed by the news agency deserve further scrutiny.

One was Mark Montgomery, a retired US Navy rear admiral affiliated with the Foundation for Defense of Democracies, a hawkish think tank in Washington. The other was Jonathan Czin, a former senior CIA analyst, now with the Brookings Institution.

Neither of them is known to be pro-China. However, both concluded that the stable oil prices are due to China's energy strategy. The AP report noted that we have been "free-riding off Beijing in a weird way." When analysts from opposing perspectives recognize the significance of a nation's foresight, it warrants considerable consideration.

However, my argument extends beyond the simplistic narrative that China has performed admirably.

The idea that the United States benefits from China's efforts presents a fascinating reversal: Those taking a free ride are often more than passive beneficiaries; they are passengers who have long neglected to contribute to the provision of public goods. Unless we ask how this inversion arose, in legal and institutional terms, we are merely repeating sentiments rather than thinking them through.

The law of passage and the arithmetic of making room

Let's consider the facts. Traffic through the Strait of Hormuz dropped 90-95 percent this year, stranding 16 million barrels of crude oil a day. The scale of the supply disruption exceeded the peaks of the three previous oil crises.

The International Energy Agency coordinated an emergency release of 400 million barrels from the strategic reserves of its 32 members, the largest in its history. Yet after a brief decline, oil prices climbed again.

China responded very differently. It did not undertake a large-scale release of strategic reserves and join the scramble for supplies. Instead, its imports fell month by month in the second quarter: down 20 percent year on year in April, 29 percent in May, and 41 percent in June.

This was equivalent to making an additional 5 percent of the oil supply available to the global market. Deloitte China partner Guo Xiaobo put it aptly: China had effectively interrupted the vicious cycle of panic buying, soaring oil prices and further stockpiling.

There is a legal gap here that merits closer examination. Under Articles 37 and 38 of the United Nations Convention on the Law of the Sea, the Strait of Hormuz, as a strait used for international navigation, is subject to the regime of transit passage. States bordering it may neither blockade it nor charge passage fees. Yet neither Iran nor the United States is a party to the convention, leaving this regime with relatively limited force over those exercising control over the strait.

International law has established rules for passage but lacks an effective mechanism to enforce them. This is the legal problem at the root of the crisis.

Where rules fail, the choices of individual actors become acts of virtue beyond legal obligation. China's decision to make room rather than scramble for supplies is not a moral pose. It rests on a highly rational, institutionalized capacity built around long-term thinking and systemic resilience.

More than simply stockpiling oil

Many people attribute China's composure to the size of its oil reserves. China's reserves are indeed substantial: about 1.2 billion to 1.3 billion barrels, equivalent to 110 to 130 days of net imports. More important, however, is a system with three complementary layers.

The first is discipline in releasing reserves. Unlike the United States, which has frequently drawn on its Strategic Petroleum Reserve – now down to about 290 million barrels, its lowest level since 1983 and only around 42 percent of its authorized capacity – China makes independent decisions on releases primarily according to domestic conditions, rather than allowing itself to be bound by short-term political cycles. This institutional approach is itself an expression of long-term thinking in energy security governance.

The second is redundancy in physical supply routes. The China-Russia crude oil pipeline, the China-Kazakhstan crude oil pipeline and the China-Myanmar oil and gas pipelines form part of four fully established strategic energy corridors: through the northwest, northeast and southwest, and by sea. A closure of the Strait of Hormuz directly impacts China's energy security by only 4-5.4 percent. Rerouting some oil through the Red Sea could reduce that figure to around 4 percent. This is not luck. It is the result of two decades of sustained investment.

The third is structural substitution on the demand side, the layer most easily overlooked. IEA data shows that China's electric vehicles displaced 1.5 million barrels a day of oil consumption in the second quarter of 2026, twice the earlier projection and equivalent to France's entire daily oil consumption.

One expert's assessment is worth considering: China accomplished in 10 years what took the United States 25 years after the 1973 oil crisis. Even that understates the achievement. What Western countries spent 25 years building after 1973 was, essentially, a single-layer framework of reserves and coordinated releases. China has built a three-layer system: reserves as a buffer, alternative supply routes and substitution for oil demand. The former is a shield; the latter is a restructuring of the foundations that makes the shield less necessary.

The IEA's pain relief and its structural limits

By comparison, the IEA's collective stock-release mechanism reveals clear structural limitations. Under the 1974 Agreement on an International Energy Program, each member is required to hold oil stocks equivalent to at least 90 days of net imports. The mechanism has been used during the Gulf War, Hurricane Katrina, the Libya war and the Russia-Ukraine conflict in 2022. A metaphor used in Reuters reporting captures its limitations: putting a Band-Aid on a wound.

The situation in 2026 is more difficult. An analysis by Brookings expert Samantha Gross noted that spreading the IEA release evenly over two months would cover only 7 percent of global demand, while the disruption at Hormuz affected the equivalent of 15 to 17 percent of global demand.

More fundamentally, the IEA mechanism dates to 1974, and its legal foundation, the Agreement on an International Energy Program, was built around the threat of a coordinated embargo by oil-producing countries. In contrast, the Hormuz crisis results from a military blockade that disrupts the flow of transportation. There is a structural mismatch between that problem and the mechanism's original design.

A Paris-based institution dominated by developed countries, with emergency stock releases as its central tool, resembles a useful hammer confronting a screw when faced with a transport corridor blocked by military force.

Energy security as a public good: Rethinking free-riding

This brings us back to the AP report's reference to "free-riding."

In the highly integrated global oil market, the energy decisions of any major economy generate positive or negative effects beyond its borders. When China chooses not to join a scramble for supplies during a crisis, it is effectively providing a public good: greater stability in global oil prices. The United States, Europe and every other oil-importing economy benefit from that stability without paying for its provision.

The problem is that global energy governance has no legal mechanism to guarantee the continued supply of this public good. The IEA's 90-day stockholding obligation applies only to its members, and China is not an IEA member. China has no treaty obligation to maintain the stability of the global energy market, yet its actions have objectively helped do so. Here lies the paradox: China has no such legal obligation but makes a tangible contribution in practice.

Conversely, the United States, as a leading force within the IEA, has a legal obligation to coordinate the release of reserves. Yet its Strategic Petroleum Reserve has fallen to its lowest level since 1983, at only about 42 percent of authorized capacity. This illustrates an insight associated with the legal philosopher H. L. A. Hart's discussion of law and morality: A minimum sense of obligation cannot sustain the maximum public good. When treaty obligations become hollow, what actually supports global energy security may be the good done beyond legal duty.

I do not propose elevating China into a global energy savior, nor do I consider free-riding an entirely appropriate metaphor. A more precise judgment is that China's ability to make room for others is primarily a product of systemic capacity, while its objective effect is to provide a real public benefit to the global energy market.

This may not be the deliberate provision of a good out of altruism. It is, however, a clear example of national capacity translating into a global contribution: China did not join the scramble for supplies, and the world gained a measure of stability as a result. China's ability to withstand the reduction in imports during the crisis was primarily due to its three-layer system. Its strong capacity and rational behavior allowed for an unintended benefit to emerge in the global market. This is a story about systems, not a moral fable.

What kind of energy security governance does the world need?

Viewed globally, the central issue exposed by the Hormuz crisis is not which country is more generous. It is that the legal foundations of global energy security governance have fallen seriously behind reality.

First, the existing system needs to move from emergency coordination to routine governance. The IEA's cycle of releasing stocks and coordinating and releasing more stocks is essentially a reactive response to crises. After each crisis, reserves fall and market vulnerability accumulates, creating a vicious cycle. Rather than comparing the depth of national reserves after a crisis erupts, it would be better to establish regular arrangements for sharing reserves and exchanging information beforehand.

Second, energy security needs to move from a zero-sum contest toward cooperation that benefits all participants. Proposals to work with the IEA, coordinate stock releases and share inventory and transport-capacity data offer a direction worth exploring. If major oil-importing countries could establish routine cooperation on reserve information, transport allocation and demand forecasts, the incentive for panic buying would be substantially reduced.

Third, and more fundamentally, the energy transition is itself the best energy security policy. China's electric vehicles are displacing 1.5 million barrels of oil demand every day. If that figure were to double again, the economic shock of a closure of the Strait of Hormuz would be far smaller than it is today. Rather than competing over the depth of reserves within the old energy system, countries should compete over the speed of transition to a new one.

When the AP report says the United States should thank China, it is describing a market reality rather than making a moral judgment. But the institutional gap behind that reality should concern us: When the provision of a global public good depends on one country's voluntary initiative rather than institutional guarantees, that provision is inherently uncertain.

An old Chinese saying goes, "Prepare before the rain comes." In energy security, such foresight should be more than the strategic wisdom of an individual country. It should become a basic principle of global governance. The world needs to move from thanking a country for acting on its initiative to building a mechanism that does not depend on gratitude.

The best public goods, after all, are sustained by institutions, not by gratitude.