Israel’s recent attacks on Iran have the potential to significantly disrupt China’s critical energy relationship with Tehran, jeopardising Beijing’s broader ambitions to expand its influence across the Middle East. For years, China has maintained a strategic partnership with Iran, which is not only Tehran’s most vital economic lifeline but also a cornerstone of China’s energy security. Iranian oil accounted for approximately 15% of China’s crude imports last year, making the Middle Eastern nation a linchpin in China’s energy portfolio.
China imports most of Iran’s oil using sophisticated mechanisms to sidestep U.S. sanctions, including complex shipping networks often referred to as the “dark fleet” and “teapot” refineries. These networks allow China to receive vast quantities of Iranian crude, frequently settling payments in renminbi via smaller banks less scrutinised by international regulators. Such arrangements have enabled China to sustain Iran’s economy despite increased geopolitical pressures.
However, the intensification of the Israel-Iran conflict threatens this delicate balance. Recent data reveals Iranian oil exports to China have sharply declined—from approximately 1.6 million barrels per day in September 2024 down to 740,000 barrels by April 2025. Despite these drops, Iran has strategically adapted its oil export operations: its main loading terminal on Kharg Island continues to operate, and a significant floating storage fleet of roughly 40 million barrels is positioned near China and within the Persian Gulf to ensure uninterrupted supply amid ongoing military tensions.
The broader geopolitical ramifications of the Israel-Iran war extend beyond crude disruptions. There is a palpable risk that Iran could escalate the situation by blocking the Strait of Hormuz, a vital maritime chokepoint through which hundreds of billions of dollars’ worth of oil and gas—including supplies from Saudi Arabia, China’s largest crude supplier outside Russia—transit annually. Any such blockade could severely hinder not only Iranian energy shipments but also the flow of hydrocarbons from Gulf countries, further endangering China’s energy imports. While China has substantial strategic petroleum reserves estimated to last 90 to 100 days, prolonged disruptions would strain Beijing’s energy security and force a shift in its import strategies.
Chinese leader Xi Jinping has publicly expressed “deep concern” over the escalating crisis, urging immediate de-escalation to prevent regional spillover. Despite these calls, China has largely maintained a position of non-interference, stopping short of direct military involvement, and limiting its role to diplomatic calls for peace. Xi’s communications with other global leaders have included calls to halt hostilities, but China’s close ties with Iran complicate its position as a potential neutral mediator. Both China and Russia have criticised Israel’s actions and floated proposals for mediation, yet Israel and its allies reportedly remain sceptical about China’s impartiality due to its economic and political ties with Tehran.
The conflict’s progression places China in a difficult strategic position. In the short term, some analysts suggest the crisis may paradoxically benefit China by diverting U.S. attention towards the Middle East rather than its rivalry with Beijing. However, long-term instability threatens to undermine China’s diplomatic influence in the region and could weaken its aspiration to be seen as a global peace broker. A diminished Iranian strength would erode one of China’s key “strategic cards” in the Middle East, thereby limiting Beijing’s leverage.
This vulnerability underscores China’s ongoing strategic imperative to diversify energy sources and accelerate the transition toward greater self-sufficiency. Renewable energy now constitutes over half of China’s power generation capacity, and Beijing is investing heavily in renewables, nuclear power, and synthetic fuel production. Chinese officials and industry leaders have voiced ambitions for China to not only reduce reliance on imports but eventually become a major energy exporter. These efforts, however, will take time to fully offset current dependencies on volatile external supplies.
Meanwhile, the United States has stepped up sanctions aimed at curtailing Iran’s military capabilities by targeting entities involved in supplying dual-use technology for Iran’s ballistic missile and UAV programmes. These sanctions, which include Hong Kong-based shipping firms, are part of broader efforts to limit Iran’s regional influence and support for proxy groups, such as Yemen’s Houthi rebels. Such moves heighten the complexity of China’s engagement with Iran, as Beijing’s commercial ties entail navigating these international restrictions without overtly defying U.S. pressures.
In summary, the conflict between Israel and Iran poses a serious challenge to China’s energy security and geopolitical strategy in the Middle East. While China’s established networks and strategic reserves provide some buffer, prolonged instability in the region would threaten the flow of vital energy supplies, weaken China’s diplomatic posture, and force Beijing to further prioritize its long-term goals of energy independence and regional stability. The situation remains fluid, and China’s cautious approach reflects a balancing act between sustaining critical economic ties with Iran and managing the risks posed by escalating regional tensions.
Source: Noah Wire Services
