Short read: China has been preparing for a global energy crisis for years. It is paying off now

Whilst the world at large has been somewhat relieved by the ceasefire, it has indeed been a huge source of relief in particular for those countries dependent on energy imports from the Gulf, primarily Asian majors such as Japan, Korea and India. Whilst China is an even bigger energy consumer and also dependent on imports, experts don’t put it in the same bracket. This piece in the Guardian explains why.

First, its relationship with Iran has meant that its sourcing of crude from Iran has barely budged through the war:

“China, which usually imports around half its crude supplies from the Middle East, is not as exposed as other Asian economies. “While a very high proportion, it is limited when compared to Japan, India or Korea,” said Meidan. Japan, for example, sources about 95% of its oil imports from the region.
Iran has continued to ship to China, the primary buyer of its oil, despite the war. China’s imports of Iranian crude have slipped only marginally, according to Kpler estimates, from 1.57m barrels per day in February to 1.47m barrels per day in March.

Chinese vessels operated by state-owned firms are meanwhile working to navigate the broader region. The Kai Jing supertanker diverted to pick up Saudi crude at a Red Sea port earlier this month, Chinese media outlet Caixin reported, and is set to dock in China in early April.”

Second, it has been accumulating large reserves:

“And even if Beijing is forced to confront an overseas supply crunch, it has quietly amassed an extraordinary hoard to mitigate the ramifications of a major shock.

Beijing does not disclose the size of its oil reserves, and estimates vary significantly. But it is widely agreed to be sitting on a massive stockpile: about 1.4bn barrels, according to Columbia University’s Center on Global Energy Policy.

After the war began, Beijing instructed its own refineries to stop exports.”

But the biggest difference of them all is how it has managed to wean itself away from the biggest demand driver for crude oil – automobile fuel.

“More electric and hybrid vehicles are sold inside China each year than across the rest of the world, according to the International Energy Agency.

Its renewable sources of power have meanwhile expanded rapidly in recent years, curbing its dependence on fossil fuels. Energy thinktank Ember estimates that wind, solar and hydropower generated about 31% of China’s electricity in 2024.”

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