“There is great disorder under heaven; the situation is excellent,” Chairman Mao used to say. But that was sixty years ago, when China was self-sufficient and had virtually no trade with other countries.
Today, the situation is quite different. That is why the leaders in Beijing are closely monitoring the hostilities between Israel and Iran hour by hour. China imports large quantities of oil from the Middle East, primarily from Saudi Arabia, but also from other countries in the region, including Iran. So far, there are no signs that oil shipments have been affected, but the situation could quickly change if hostilities escalate.
Foreign Minister Wang Yi has expressed deep concern and has recently held phone conversations with his Israeli and Iranian counterparts. In his discussion with Iran’s foreign minister, he offered Chinese assistance in de-escalating the tensions, but there is little to suggest that China can significantly influence the situation. “The only thing the Chinese can do is shut the doors and windows of their embassy in Tehran and hope the storm passes,” wrote one Egyptian commentator.
Without a stable supply of oil, the Chinese machinery grinds to a halt. The country’s own oil production has stagnated, and already in 1993 China became a net importer of oil. Since then, imports have steadily increased. Today, around 75 percent of consumption is met through imports, and more than 40 percent of that comes from the Middle East.
Exactly how much comes from Iran is uncertain. To circumvent sanctions imposed by the U.S. and other Western countries, Iranian oil is transported to China on “nameless” ships, often taking detours and undergoing transshipment in various ports. This makes the deliveries hard to trace.
According to experts, China’s oil imports from Iran may account for around ten percent of the total volume. For Iran, these shadowy shipments to Chinese ports are of vital importance, as China is the country’s largest oil customer. The clergy in Tehran is well aware that the economy would be in dire straits without this black gold. Thanks to oil exports, the regime has managed to secure state revenues and avoid political instability. Though not entirely — in recent years, angry Iranians have repeatedly taken to the streets in protest.
China has long tried to diversify its oil imports across as many countries as possible, but Iran is still considered a key piece in the country’s geopolitical game. This is due both to Iran’s size and its clear opposition to the United States. The fact that Iranians offer their oil at a discount doesn’t hurt either. China therefore sees Iran as a strategic partner in the Middle East. The partnership is largely rooted in a 25-year cooperation agreement signed four years ago. The deal includes Chinese investments in Iranian infrastructure and the oil sector in exchange for long-term oil deliveries from Iran.
China also played a driving role when Iran and Saudi Arabia restored diplomatic ties in 2023. The agreement was announced after several days of secret negotiations in Beijing. During the signing, the aforementioned Wang Yi stood side by side with the two delegations — a highly symbolic moment and a demonstration of China’s diplomatic ambitions.
While Chinese leaders can act strikingly aggressive toward their close neighbors, China’s Middle East diplomacy takes a completely different approach. Here, the goal is to erase divisions, promote dialogue, and build bridges — mostly because of the oil.
Since Israel’s sudden attack on Iran on June 13, Chinese spokespersons have emphasized the need for a ceasefire and negotiations between the parties. But they make no secret of the fact that they see Iran as the attacked party and hold Israel primarily responsible for the escalation. At the same time, China maintains that Iran has the right to develop civilian nuclear energy. However, if the country becomes a nuclear power, China believes it would lead to instability in the Middle East and trigger a new arms race.
In the coming years, China will need even more oil. The International Energy Agency (IEA) predicts that demand will peak in 2030 and then level off. That estimate may prove overly optimistic, because although China is investing in various forms of new energy, not everything is going according to plan. Chinese energy experts have on several occasions expressed concern over the pace of the transition and say the speed must increase.
Domestically, there is likely little more oil to be extracted. The Daqing oil field in the northeast was long a cornerstone of the country’s energy supply. Other fields were developed later, but production is declining. The state oil industry has managed to increase offshore extraction, but not enough to make the country self-sufficient. China must therefore stay on good terms with its foreign suppliers.
This explains why Chinese delegations frequently shuttle to Saudi Arabia. President Xi Jinping’s first visit in 2016 marked the beginning of what was described as a “comprehensive strategic partnership.” Six years later, he returned to Riyadh to sign no fewer than 34 cooperation agreements. China’s efforts to appease the regime cover a broad spectrum, from investments in new roads to 5G and high-tech “smart cities.”
But China is not alone in courting the Saudis. The United States also has strong interests in the region. This gives Crown Prince Mohammed bin Salman a luxury problem: he can play the great powers against each other and demand ever more concessions.
China’s perhaps most reliable oil partner right now is Russia. While Vladimir Putin continues his war against Ukraine, the Chinese are buying large quantities of Russian oil, again at discounted prices. In terms of barrels, imports are reportedly slightly higher than those from Saudi Arabia. The oil is transported both by ship and through pipelines. Putin and Xi have met more than forty times since 2012 and appear to have developed a close personal relationship. This could prove especially important if unrest in the Middle East worsens further.
In the meantime, the five thousand Chinese citizens in Iran would do well to take precautions — especially if Israel’s Benjamin Netanyahu aims to topple the regime in Tehran.
