How China’s energy strategy could give it edge in supply crisis Article by Guardian

China’s preparation for a looming energy crisis may offer it a rare advantage in a global supply crunch, but even the world’s second-largest economy is not invulnerable. The Guardian reports that Beijing has been quietly building buffers for years, anticipating disruptions like the current US-Israel war on Iran that has thrown global oil markets into turmoil.

President Xi Jinping has been preparing for a crisis like this for years. China must secure its energy supply “in its own hands”, its president was reported to have said during a visit to one of its vast oilfields in 2021. Now, with the Strait of Hormuz nearly closed and Middle Eastern energy infrastructure under attack, China’s foresight is paying off, at least in part. Oil exports from the Middle East have tumbled 61% over recent weeks, according to maritime tracking consultancy Kpler, roiling countries across Asia, which relied on the region for 59% of its crude imports in 2025, and have been left racing to conserve energy.

Yet China’s position differs markedly from its neighbours. Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies, notes that the country’s energy system possesses “significant buffers” – from huge reserves of oil and liquefied natural gas (LNG) to a robust domestic supply, including alternative energy sources, such as wind and solar. Unlike Japan, India, or South Korea—where Middle Eastern crude accounts for up to 95% of imports—China typically sources about half its oil from the region, making it less exposed to immediate supply shocks.

Despite the ongoing conflict, Iran continues to ship oil to China. 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.

China has also 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 Centre on Global Energy Policy. After the war began, Beijing instructed its own refineries to stop exports.

At the same time, the Chinese state has sought to reduce its economic reliance on fossil fuels. 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.

But the longer this crisis drags on, the more complicated – and painful – it becomes. Energy stockpile releases are “easier said than done”, according to Meidan, who said the mechanism for China’s strategic petroleum reserve (SPR) has been tested only once. “While another, larger, SPR release is not impossible, it would likely require a protracted supply shortage and a significant price spike.” Independent refiners in China – the biggest importers of Iranian crude – are the most vulnerable, even as they turn to Russia. Industrial and chemical sectors reliant on LNG also face the prospect of higher prices and supply shortfalls.

“While a short disruption could be manageable, the prospect of lengthy disruptions and the associated price increases is raising alarm bells in Beijing,” said Meidan.

China enters the crisis with more resilience than most, thanks to strategic planning, diversified energy sources, and a growing renewable infrastructure. Yet weeks of instability could test even this fortified system, highlighting the intricate vulnerabilities in global energy interdependence. Xi’s long-term vision has delivered advantages, but in a volatile Middle East, no country holds complete control over its energy destiny.

By Jeyhun Aghazada