Israel’s Abba Eban Institute for Diplomacy and Foreign Relations expert on China and the Middle East affairs, Gedaliah Afterman, warned of potential consequences if Israel’s aggression against Iran continues to escalate. He suggested that such actions could undermine China’s influence in the Middle East and potentially disrupt its trade with Iran, a crucial oil supplier. With the rising risks in the Strait of Hormuz, China’s energy self-sufficiency challenges are becoming more pronounced.
For years, China has leveraged its ties with Iran to expand its influence in the Middle East, relying on cheap Iranian crude oil and broader oil supplies from the Gulf region as the foundation of its energy structure, being the world’s largest oil buyer.
Afterman highlighted Chinese President Xi Jinping’s recent calls to de-escalate tensions between Israel and Iran, emphasizing that China views its oil purchases from Iran as normal trade and opposes US-led sanctions against Iran. This stance reflects China’s concerns about the recent attacks. He told the Financial Times, “If the situation continues to escalate, China (the CCP) will lose energy security (oil supply) and Iran’s strategic leverage, resulting in significant losses.”
According to the US Energy Information Administration (EIA), Iranian crude oil accounted for about 15% of China’s total crude oil imports last year, with an average daily import of around 11.1 million barrels.
China had been steadily increasing its crude oil imports from Iran from 2023 to early 2024, but started reducing purchases towards the end of last year due to intensified US sanctions. By early 2024, the amount of crude oil China imported from Iran had significantly dropped. Additionally, to circumvent sanctions, some Iranian crude oil was rerouted through Malaysia or re-labeled before exporting to China.
Iran has threatened to block the Strait of Hormuz, which could potentially escalate the conflict between Israel and Iran into a regional conflict in the Middle East, increasing global energy supply risks.
If China’s Iranian crude oil supply is completely cut off and alternative oil-producing countries cannot transport oil to China through that strait, China’s energy supply shortfall may be difficult to make up. One of China’s main oil suppliers, Saudi Arabia, also exports oil through the Strait of Hormuz.
According to Michal Meidan, the head of the China Energy Project at the Oxford Institute for Energy Studies, China has approximately 90 to 100 days of oil reserves.
Neil Beveridge, the Asia Pacific research director at consultancy Sanford C. Bernstein & Co., stated that this crisis presents a “key lesson” for the Xi Jinping government to accelerate its push for energy self-sufficiency. He emphasized the need to expedite efforts if progress had not been sufficient before.
Analysts suggest that while China may benefit in the short term from the US focusing on the Middle East rather than US-China relations, in the long run, weakening Iran’s strength could undermine China’s diplomatic influence in the Middle East and shake its image as a “global conflict mediator” domestically.
Despite China’s active expansion of influence in the Middle East in recent years, Beijing may still opt for a cautious approach in the face of the Israel-Iran conflict, similar to its non-intervention when its Syrian ally Assad’s regime was collapsing last year, demonstrating the limitations of China’s diplomatic influence.
Jingdong Yuan, the director of the China and Asia Security Program at the Stockholm International Peace Research Institute (SIPRI), pointed out that while China verbally supports countries perceived to be unfairly treated or coerced by the West, it typically adopts a conservative stance in regional conflicts.
Yun Sun, director of the China Program at the Stimson Center think tank, stated that a collapse of the Iranian regime would harm China’s interests in the Middle East and could signify a rise in US influence. She remarked, “An Iranian regime downfall, as we know it, is not good news for China and to some extent represents an expansion of American influence.”
(This article references reports from the Financial Times)