China’s Energy Shield: How Xi Jinping Prepared for Middle East Crisis

Beijing appears to be weathering the storm of the escalating conflict in the Middle East and the resulting disruption to global energy markets far better than many other Asian economies. While countries across the continent scramble to conserve energy and secure alternative supplies in the wake of tumbling oil exports from the region, China’s long-term strategic planning – prioritizing energy security and diversifying its sources – is now demonstrably paying off. The current crisis, triggered by the US-Israel war on Iran, has underscored the foresight of President Xi Jinping’s 2021 directive to ensure China’s energy supply remains “in its own hands,” as reported by People’s App.

The war has effectively closed the Strait of Hormuz, a critical waterway for global trade, and brought key energy facilities across the Middle East under threat. Maritime tracking consultancy Kpler estimates that oil exports from the region have plummeted by 61% in recent weeks, sending shockwaves through Asia, which relied on the Middle East for 59% of its crude imports in 2025. Nations across Southeast Asia are already implementing energy conservation measures as costs soar, as detailed in reporting by The Guardian.

Buffers Against Disruption

However, China, the world’s second-largest economy, possesses “significant buffers” within its energy system, according to Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies. These buffers include substantial reserves of both oil and liquefied natural gas (LNG), alongside a robust domestic supply bolstered by growing alternative energy sources like wind and solar power. While China typically imports around half of its crude oil from the Middle East, its reliance is less acute than that of countries like Japan, which sources approximately 95% of its oil from the region.

Crucially, Iran has continued to ship oil to China, remaining its primary buyer despite the ongoing conflict. Kpler estimates indicate a marginal decrease in Chinese imports of Iranian crude, falling from 1.57 million barrels per day in February to 1.47 million barrels per day in March. This continued trade flow provides a vital lifeline for both nations, circumventing broader disruptions to the global market.

Navigating the Red Sea

Chinese state-owned firms are actively working to navigate the challenges posed by the crisis. Earlier this month, the supertanker Kai Jing diverted to pick up Saudi crude at a Red Sea port, as reported by the Chinese media outlet Caixin, and is scheduled to arrive in China in early April. This demonstrates a proactive effort to secure alternative supply routes and mitigate the impact of the Strait of Hormuz closure.

Beyond immediate supply adjustments, China has quietly amassed a substantial strategic oil stockpile. Estimates vary, but Columbia University’s Center on Global Energy Policy suggests reserves of around 1.4 billion barrels. This hoard provides a crucial cushion against prolonged disruptions and potential price spikes. Following the outbreak of the war, Beijing instructed its domestic refineries to halt exports, further safeguarding its internal supply.

A Green Energy Transition

China’s long-term strategy extends beyond fossil fuels. The country is rapidly transitioning towards renewable energy sources, reducing its overall dependence on imported oil. More electric and hybrid vehicles are sold annually in China than in the rest of the world combined, according to the International Energy Agency. Wind, solar, and hydropower already generated approximately 31% of China’s electricity in 2024, as estimated by the energy thinktank Ember. This commitment to green energy is not merely an environmental initiative; it’s a calculated move to enhance energy independence, and resilience.

The Limits of Self-Reliance

Despite these advantages, China’s energy security is not absolute. Releasing strategic petroleum reserves, while possible, is not a simple undertaking. Meidan notes that China’s strategic petroleum reserve (SPR) mechanism has been tested only once, and a larger release would likely require a protracted supply shortage and a significant price increase. Independent refiners, heavily reliant on Iranian crude, remain particularly vulnerable, even as they seek alternative sources like Russia.

Industrial and chemical sectors dependent on LNG too face the prospect of higher prices and potential supply shortfalls. While a short-term disruption may be manageable, a prolonged crisis could pose significant challenges to China’s economic growth. “While a short disruption could be manageable, the prospect of lengthy disruptions and the associated price increases are raising alarm bells in Beijing,” said Meidan.

The U.S. Response and Delayed Diplomacy

The unfolding energy crisis has also complicated diplomatic efforts. President Donald Trump requested assistance from China in reopening the Strait of Hormuz, a request that was reportedly dismissed by Beijing. Simultaneously, Trump has indicated a desire to postpone his planned trip to China, citing the war in Iran. Treasury Secretary Scott Bessent initially cast doubt on the trip’s timing, but clarified that the delay was not intended to pressure China regarding the Strait of Hormuz, according to NBC News. China’s foreign ministry has stated that communication regarding the visit continues.

What’s Confirmed and What Remains Unclear

Confirmed: China possesses substantial energy reserves and a growing renewable energy sector, providing a degree of insulation from the current crisis. Iran continues to supply oil to China despite the war. China is actively seeking alternative supply routes. Beijing has halted oil exports from its own refineries.

Unclear: The precise size of China’s strategic oil reserves remains undisclosed. The long-term impact of the crisis on China’s economic growth is still uncertain. The extent to which China will be willing to release its reserves in the event of a prolonged disruption is unknown. The future of President Trump’s planned trip to Beijing remains in question.

Looking Ahead: A Test of Resilience

China is demonstrably better positioned than many nations to navigate the economic fallout from the US-Israel war on Iran. However, its energy supply is not entirely immune to global disruptions. As the crisis potentially extends, China’s resilience will be rigorously tested, mirroring the challenges faced by the rest of the world. The coming months will reveal the true extent of Beijing’s preparedness and its ability to maintain economic stability in the face of escalating geopolitical tensions and a volatile energy market. The situation demands continued monitoring of crude oil flows, China’s SPR releases (if any), and the evolving diplomatic landscape between Washington, Beijing, and regional actors.