The ongoing conflict in the Middle East has stirred unease in Beijing, compelling China to reassess its strategic position amidst rising geopolitical tensions. While the immediate impact of the hostilities has not yet disrupted China’s oil supplies, the potential long-term repercussions are prompting serious concerns about its investments and ambitions in the region.
Strategic Implications of the Conflict
Although China currently holds sufficient oil reserves to sustain its energy needs for several months, the spectre of prolonged conflict looms large. If the situation escalates, China may find itself increasingly reliant on Russia for energy support. This week, thousands of delegates from the Communist Party convened in Beijing to deliberate on the trajectory of the world’s second-largest economy, which is grappling with sluggish consumption, an ongoing property crisis, and substantial local debt. In a clear sign of these economic challenges, China has revised its annual growth target to its lowest level since 1991, even as it strives to advance its high-tech and renewable energy sectors.
The potential for disruption in the Strait of Hormuz, a crucial conduit for global oil transportation, poses a significant threat. Philip Shetler-Jones of the Royal United Services Institute cautions that continued instability in the Middle East could reverberate across other key regions for China. “African economies, for instance, have benefitted from steady flows of Gulf capital. If that investment stream diminishes, it risks broader instability that could undermine China’s long-term interests,” he explains.
The Fragile Nature of Sino-Iranian Relations
China’s relationship with Iran has often been portrayed as one of strategic partnership, particularly following the signing of a 25-year cooperation agreement in 2021, during which China pledged to invest $400 billion in exchange for a steady supply of Iranian oil. However, analysts indicate that actual investment has been far less than promised, despite China importing significant quantities of Iranian crude—1.38 million barrels per day in 2025, accounting for approximately 12% of its total imports.
Reports suggest that much of this oil is being disguised as Malaysian to circumvent sanctions, and there are allegations of arms sales between the two countries. While China denies allegations of supplying Iran with advanced weaponry, the US has accused Beijing of aiding Iran’s missile programme. The partnership, while seemingly robust, is fundamentally transactional, lacking the ideological depth that characterises many Western alliances. As Professor Kerry Brown from King’s College London notes, “China’s relationship with Iran is less about mutual support and more about opportunism.”
Navigating a Complex Geopolitical Landscape
In light of these developments, China has adopted a cautious stance. The Chinese government has issued a muted condemnation of US and Israeli actions in Iran, with Foreign Minister Wang Yi labelling the attacks as “unacceptable.” However, Beijing’s ability to influence events in Iran has been limited, leaving it on the sidelines as the conflict unfolds.
As China positions itself as a counterbalance to US influence, it must grapple with the reality of its military limitations. Philip Shetler-Jones argues that while China aspires to be perceived as a global leader, it does not yet possess the capacity to protect its interests or allies in the same manner as the United States. “China is not equipped to intervene militarily, even if it desired to,” he warns.
Notably, Xi Jinping is likely to continue presenting himself as a stabilising force in contrast to Western leaders. The crisis in the Middle East provides an opportunity for China to highlight perceived Western hypocrisy and foster its image as a responsible global actor.
The Uncertainty of US-China Relations
As the situation evolves, the unpredictable nature of US politics remains a significant factor for China. With President Trump scheduled to visit China for talks later this month, questions abound regarding the trajectory of US foreign policy and its implications for global stability. Some analysts speculate that the ongoing conflict could lead to a shift in US priorities, potentially allowing China greater leeway to pursue its interests.
However, the prospect of engaging with an erratic US administration presents its own challenges. While some elements within China may seek to capitalise on the US’s perceived warmongering, the reality is that an unstable US may not align with China’s long-term strategic goals.
Why it Matters
The ongoing unrest in the Middle East not only impacts regional dynamics but also poses profound implications for global economic stability. For China, a nation heavily reliant on secure energy supplies and foreign investments, the evolving situation presents both challenges and opportunities. As Beijing navigates this complex landscape, its responses will significantly influence its international standing and economic sustainability in an increasingly interconnected world.
