US-Israel attacks on Iran create instability in critical crude oil waterway

Despite escalating geopolitical tensions caused by US-Israel attacks on Iran that have cast a shadow over the Strait of Hormuz — a vital international waterway critical to oil shipments — industry experts said China's energy security remains fundamentally unshaken.

A robust energy framework of strategic diversification, combined with massive strategic reserves and expanding land-based supply routes, created a "resiliency shield" capable of weathering most significant maritime disruptions, they said.

"While a prolonged blockade would undoubtedly roil global markets, it is unlikely to significantly disrupt China's overall oil supply or import stability," said Lu Ruquan, president of the China National Petroleum Corp Economics and Technology Research Institute.

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The confidence of the world's largest energy consumer is anchored by a multifaceted strategy that prioritizes emergency stockpiles and a wide array of import channels, Lu said.

"China's long-standing policy of global diversification allows it to lean on established partners across the Atlantic and Africa. Suppliers such as Brazil, Nigeria and Angola — all of which have historically been cornerstone sources of Chinese imports — providing a geographic counterweight to Middle East dependency."

His comments came after a potential supply shock triggered by US-Israel strikes on Iran over the weekend, which led to renewed concerns over possible disruptions to crude shipments through the Strait of Hormuz, which saw over 14 million barrels per day flow through last year, constituting around a third of the world's total seaborne crude exports, according to data from Kpler.

Major oil and gas producers in the Middle East use the waterway to transport energy from the region and about three-quarters of those barrels went to China, India, Japan and South Korea, it said.

He Ning, an analyst at Kaiyuan Securities, said the four economies collectively accounted for approximately 69 percent of all crude and condensate flows through the strategic waterway in 2024. China remains at the heart of this demand, with a total overall import volume of 11 million barrels per day in 2024, among them about 43.5 percent from the maritime passage.

Lu believes while the sheer scale of these figures often triggers market concerns, China's structural preparedness has effectively mitigated vulnerability to the region's volatility.

The resilience is structural, he said. Non-strait routes including pipelines from Saudi Arabia and Iraq to the Red Sea and the Mediterranean Sea could also offer viable alternatives that ensure the physical flow of oil continues, even if maritime "choke points" are restricted.

Internal safeguards, on the other hand, provide the next layer of protection.

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The institute said China has built up its strategic energy reserves, with the combined volume of strategic and commercial stocks providing China with at least 90 days of crude oil import coverage at 2024 levels.

Another significant shift in China's energy security posture in recent years is the deepening energy cooperation with oil-rich economies, including Russia and Kazakhstan. By utilizing the China-Russia and China-Kazakhstan crude oil pipelines, Beijing has secured a steady and growing supply of land-based oil that is entirely immune to maritime blockades or naval tensions in the Middle East, said Lu.

Domestically, China is proactively scaling up its oil and natural gas output by accelerating the exploration and extraction of unconventional energy sources, such as shale oil and gas.

Contact the writers at zhengxin@chinadaily.com.cn