If China loses control, look out oil: Dan Yergin

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The massive selling in Chinese stocks is stoking fears that the government there may be losing control of its carefully managed economy, said Dan Yergin, a leading expert in international politics, energy, and economics—a prospect that's pressuring oil prices.

"We are seeing a panic in China. It goes back to 2008, when it always seemed the Chinese were really in control of their economy. They were the first ones out there with a stimulus, and now it looks like they don't know what to do," the vice chairman of information and analytics provider IHS told CNBC's "Squawk Box" Wednesday.

"The Chinese economy has already been slowing from the growth that it had been before," he continued. "The prime minister says it's no longer high growth, its medium-to-high growth. And if it's medium or low-to-medium growth, that's a big hit for the oil market."

A Pulitzer Prize winner for his book "The Epic Quest for Oil, Money & Power," Yergin stressed the importance of China as a consumer of crude. "If you look between 2003 and 2013 ... half of all the growth in world oil demand was in China," he said.

Many experts have been arguing that the Chinese economy won't be hurt by the meltdown in stocks there, which saw the Shanghai composite and Hong Kong's Hang Seng index each fall nearly 6 percent Wednesday.

The Shanghai composite is down more than 30 percent since hitting a seven-year peak of 5,166.35 on June 12. But despite the recent rout, the index was still nearly 9 percent higher for the year as of Wednesday's close and up 70 percent in the past 12 months.

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The other factors putting pressure on oil are the Iran nuclear talks and the Greece debt crisis, he said—referring to Iran's "super-skilled negotiators" and the "very unskilled" Greek negotiators.