Xi Jinping has been preparing for energy crises for years, emphasizing the importance of securing energy supplies domestically. The ongoing US-Israel conflict with Iran has severely impacted the Middle East, leading to a significant closure of the Strait of Hormuz and a 61% drop in regional oil exports. While most Asian countries heavily rely on Middle Eastern oil, China is somewhat insulated. It has substantial oil and liquefied natural gas reserves, along with a growing capacity for renewable energy sources like wind and solar.
China typically imports around half of its crude oil from the Middle East but has been less affected than countries like Japan, which sources 95% of its oil from the region. Notably, despite the conflict, Iran continues to export to China, its largest buyer. Reports indicate that Chinese state-owned vessels are finding alternative routes to source crude oil.
The Chinese government has also built extensive oil reserves, estimated at about 1.4 billion barrels. As the conflict continues, concerns grow about potential long-term supply shortages and rising prices. Independent refiners in China face vulnerability, highlighting that while short-term disruptions might be manageable, prolonged crises could test China’s economic resilience.
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