Why did Iran war not affect China’s energy security so far?

As the Israel-US war on Iran has meandered on, India has faced the shortage of liquified petroleum gas (LPG) and experienced a social panic over the possible shortage of petrol and diesel. One does not see similar news from China despite its bigger economy, larger consumer market and role as a supplier to global markets, raising the question of how China escaped the early consequences and how, and in what ways it may be affected in the future. The answer to that question lies in what China has done in the past two decades and how its geography, its position as the world’s largest polluter, its stringent actions against the local air pollution challenges and its concerns over status have combined to protect it from the current crisis.

How did it tackle the Malacca dilemma?

About 15 years ago, China’s concerns over its dependence on the Malacca strait for trade and energy transits, and the near permanent American presence in the vicinity were real. The country sought to address this by building the capacity to create strategic petroleum reserves (SPR) and used long-term contracts to fill those up. Today China has nearly 120 days of SPR storage and it may be tapping into some of that. Data suggests that a combination of China’s oil reserves and diversification may allow it to bypass imports from the Strait of Hormuz for several months.

China’s second approach to reducing the dependence on the Malacca strait was to build pipelines to import oil and gas from Central Asia and Russia. If the straits were a geopolitical challenge, its stable relations with its Central Asian neighbours made the geography an opportunity.

Now almost 20 per cent of China’s crude oil imports happen through these pipelines, including an estimated 900,000 barrels per day from Russia. Consider that against the failed attempts to establish the Iran-Pakistan-India (IPI) and the Turkmenistan-Afghanistan-Pakistan- India (TAPI) pipelines, which have been stalled for a combination of reasons. On the other hand, China’s national oil companies like Sinopec, CNPC and CNOOC, have traditionally had deeper pockets and China has been an active negotiator in conflict zones like Sudan or Angola and their proactive strategies have also helped it create a good diversification in its imports sources.

What are China’s climate and energy strategies?

For its part, China joined hands with India, South Africa, and Brazil, to protect their carbon space, forming the BASIC bloc during the early days of global climate change negotiations.

However, it also used its status as the world’s largest polluter and managed to get the US-China Ten-Year Framework Cooperation on Energy and Environment, in June 2008, before it agreed to any commitments under the United Nations Framework Convention on Climate Change (UNFCCC). This cooperation and the subsequent knowledge and technology transfer led to the success of the Paris Climate Accord and allowed China to create a foundation for its industrial surge in sectors like solar panels, wind and tidal energy, energy efficiency and management, carbon storage and sequestration, electric mobility including cars and buses.

Along with this, China has also faced a significant criticism for its role as the world’s largest coal consumer. China has also worked to undertake energy transition plans and address the air pollution challenge that Beijing and other cities have faced via time-bound targets declared in its numerous white papers, task forces and bureaucratic restructuring initiatives.

How did EVs help lower oil demand?

China’s role as a large middle-class economy also matters. China is also the largest consumer of electric vehicles. And in 2025 nearly half of the cars sold in China were electric vehicles. Its preferential policies favour EV via tax concessions, mandates and preferential lottery chances and its scaling capabilities and larger size of consumer markets have contributed to their popularity. This has allowed China to significantly reduce its imports in 2025 and this number is bound to grow in the coming years.

Is economic slowdown a factor?

Lastly, China is indeed facing a serious economic slowdown which means its overall energy consumption is lower. It has set a modest target of growth at 4.5% for 2026. Its construction sector has nearly stalled and it means that sectors such as cement, iron and steel and others are not doing well too. China’s role as the world’s factory is changing gradually compared to how it was a decade ago, and it has been a good thing for its energy demand.

To sum it up, a combination of opportunities, proactive strategies and strategic and status concerns have helped China to stay afloat stronger in the current crisis.

(Avinash Godbole is a Professor and Associate Academic Dean, JSLH, JGU. Views expressed are personal)