Israeli strikes big worry for Iran's economic lifeline China, its years-long West Asia gambit at risk

First Post

4 hours ago

Israel's recent attacks on Iran have raised serious concerns in China, threatening to disrupt Beijing's key energy supply routes and its hopes for a bigger role in the region, according to a report read more
Israel's recent attacks on Iran have raised serious concerns in China, threatening to disrupt Beijing's key energy supply routes and its hopes for a bigger role in the region.
For years, China has relied on its ties with Iran to secure a steady flow of discounted crude oil and expand its geopolitical footprint in the region.
As the world's largest oil importer, China has made Iranian and broader Gulf energy supplies a cornerstone of its energy strategy. But escalating tensions between Israel and Iran now risk cutting China off from some of its most critical trading partners, according to a Financial Times report.
STORY CONTINUES BELOW THIS AD
As Iran-Israel conflict rages, Chinese President Xi Jinping has urged all sides to de-escalate the conflict 'as soon as possible.'
Beijing has also pushed back against US sanctions on Tehran, insisting that Washington should not interfere with its 'normal trade' with Iran.
'Of course, China is worried (by the latest attacks),' Financial Times quoted Gedaliah Afterman, an expert on China and the Middle East at the Abba Eban Institute for Diplomacy and Foreign Relations in Israel, as saying.
'If this situation continues to escalate, then they lose quite a bit, both in terms of their energy security and Iran as a strategic card that China holds,' Afterman added.
Beijing Tehran's key economic lifeline
Since the US ramped up sanctions on Iran's nuclear programme in 2018, Beijing has emerged as Tehran's key economic lifeline. China now buys the bulk of Iranian oil and supplies it with machinery, electronics, vehicles, and nuclear equipment.
In 2024, Iranian crude made up nearly 15% of China's oil imports. Overall, China imported about 11.1 million barrels per day, according to the report, citing US Energy Information Administration.
Chinese imports of Iranian crude rose steadily through 2023 and much of 2024 but began declining late last year as fears of tougher US sanctions grew, according to the Financial Times report, citing data from Kpler and Bernstein.
STORY CONTINUES BELOW THIS AD
In September 2024, Iran exported 2.4 million barrels per day, with China buying 1.6 million. By April 2025, exports had dropped to 2.1 million barrels, with China's share falling to 740,000 barrels per day.
Analysts note that much of Iran's oil is relabelled or rerouted through countries like Malaysia to bypass sanctions.
Fitch Ratings said this week that even a complete loss of Iranian oil could be offset by spare capacity from OPEC+ producers. However, the broader risk looms: the conflict threatens to spread, and Iran has warned it could block the Strait of Hormuz, a critical chokepoint through which hundreds of billions of dollars in Gulf oil, including from Saudi Arabia, flow annually to China.
China doesn't publicly disclose its strategic petroleum reserve levels, but estimates suggest it has 90–100 days of supply in case of disruptions, Financial Times quoted Michal Meidan of the Oxford Institute for Energy Studies as saying
While China increasingly depends on Saudi oil, over 25% of its liquefied natural gas (LNG) imports in 2024 came from Qatar and the UAE, added the report, citing S&P Global.
STORY CONTINUES BELOW THIS AD
Despite holding 15 long-term LNG contracts with both countries, analysts warn that any supply shock could force China to buy on the spot market at significantly higher prices.
For China, the Israel-Iran crisis war comes amid a tectonic shift in the country's energy mix. The country has for decades been the world's biggest oil user.
China eyes energy independence
Under Xi, China is racing to boost its energy independence, a transition that ultimately requires a massive increase in renewable energy and the electrification of the country's transport and manufacturing base.
A boom in solar and wind has taken renewables' share of electricity power plant capacity to 56 per cent last year, up from around one-third a decade ago.
Neil Beveridge, head of Asia-Pacific research at Bernstein, told Financial Times that the 'key takeaway' for Xi's administration from the crisis will be to double down on its self-sufficiency drive.
'If it wasn't happening fast enough before, it will be happening even faster now,' Beveridge was quoted as saying.
STORY CONTINUES BELOW THIS AD
According to Financial Times, citing analysts, China could gain short-term relief as US attention shifts to the Middle East, easing pressure on Beijing. But in the long term, a weakened Iran could erode China's regional influence and challenge its image as a global mediator.
China-Iran ties
Beijing signed a 25-year cooperation deal with Tehran in 2021, and Iran joined the China-led Shanghai Cooperation Organisation in 2023, part of China's push to offer an alternative to US-led institutions.
China also brokered a Saudi-Iran deal and proposed a 12-point peace plan for the Russia-Ukraine war. Still, its muted response to the Iran-Israel conflict, much like during last year's collapse of ally Bashar al-Assad's regime in Syria, underscores the limits of its diplomatic reach.
Jingdong Yuan, director of the China and Asia security programme at the Stockholm International Peace Research Institute, told Financial Times that while China rhetorically supports countries 'seen as receiving unfair treatment or coercion from the West', in reality Beijing's approach to regional conflicts was 'always cautious'.
STORY CONTINUES BELOW THIS AD
Beijing will be concerned about the impact on other allies in the region, such as Saudi Arabia.
'The demise or the collapse of the Iranian system or the Iranian power as we knew it is not good news for China,' Financial Times quoted Yun Sun, an expert on Chinese foreign policy with the Stimson Center, a US think-tank, as saying.
'That indirectly means that American influence has expanded,' Yun Sun added.
With inputs from agencies