The strategic implications for Beijing of the conflict in Iran
The crisis triggered by the military operation carried out by the United States and Israel against the Islamic Republic of Iran on 28 February has opened up two distinct lines of analysis. On one hand, the conflict’s immediate impact has emerged on regional stability and energy markets; while, on the other, have come to the fore its international political implications and the competition between major powers. In this context, the People’s Republic of China (PRC) stands out among the actors involved, likely committed to safeguarding its energy and commercial interests linked to the region, whilst maintaining a cautious stance aimed at avoiding a direct confrontation with Washington.
On the international stage, since early 2026, China has already suffered the loss of a key strategic partner with the removal of President Maduro by the United States. Now, the conflict in Iran risks depriving Beijing of a second key player in its global network. Indeed, from China’s perspective, Tehran serves as a functional partner in the PRC’s strategy to expand its partnerships whilst simultaneously limiting US influence in Asia and the Middle East. It is in this context, in fact, that Beijing welcomed Iran’s accession to the Shanghai Cooperation Organisation in 2023 and to the BRICS in 2024. On the other hand, China is a key partner for Tehran, particularly as the main market for Iranian exports following the imposition of new US sanctions imposed in 2018 on the Islamic Republic, and the implementation of President Trump’s ‘maximum pressure’ campaign. In trade terms, bilateral exchange between China and Iran already amounted in 2023 to approximately $18 billion in Chinese exports to Iran and $28 billion in Iranian imports to China, of which nearly $18 billion was in hydrocarbons alone, for a total trade volume of around $46 billion. Furthermore, China is the world’s leading buyer of Iranian crude oil, accounting for more than 80% of Iran’s oil exports, with an estimated 1.38 million barrels per day of Iranian oil purchased in 2025, equivalent to just under 12% of Beijing’s total crude oil imports.
Against the backdrop of the current crisis in the Middle East, the blockade of the Strait of Hormuz is of particular significance to Beijing, as in 2025 around 35% of China’s oil imports, excluding Iranian crude, originated from there. The disruption to supplies has in fact forced the PRC to rapidly assess alternative sources, likely through an increase in imports from Russia. However, a prolonged reduction in flows through Hormuz and the resulting pressure on the global oil market could encourage Moscow to reduce the discounts linked to Western sanctions over the conflict in Ukraine, with a likely increase in supply costs for purchasing countries, including China.
Nevertheless, in the short term, this scenario could pose a limited risk to the People’s Republic. Indeed, it is estimated that China holds strategic crude oil reserves of 1.4 billion barrels, sufficient to cover approximately six months’ demand even in the event of a total disruption of Middle Eastern supplies. Confirming this, in the first two months of 2026, the PRC is reported to have imported approximately 97 million tonnes of oil, marking a 16% increase compared to the same period in 2025. This growth may have been partly driven by the disruption to Venezuelan supplies following the removal of President Maduro by the United States, which deprived the PRC of approximately 389,000 barrels per day.
However, a potentially more critical issue for the PRC could be the resilience of its economic footprint in the Middle East against a backdrop of growing regional instability. Over the past decade, the PRC has progressively built a multifaceted economic presence in the region, driven, in part, by the intensification of Sino-American trade rivalry. This presence spans multiple sectors, from the automotive industry in the United Arab Emirates (UAE) to the steel industry in Saudi Arabia, from investments in regional port infrastructure - including the ports of Haifa in Israel and Khalifa in the UAE - to the development of Iran’s energy system, which is financed, built and managed by dozens of Chinese companies. Overall, between 2019 and 2024, China has in fact invested capital amounting to $89 billion, an investment that the conflict in Iran risks undermining not only in terms of contingent losses, but also, more structurally, through an erosion of China’s economic projection and presence in the medium term.
Despite the points highlighted so far, it cannot be ruled out that the Middle Eastern conflict could generate medium- to long-term dynamics potentially favourable to the People’s Republic in its competition with Washington in the Indo-Pacific. The Trump Administration’s engagement in Iran is, in fact, absorbing significant military resources, diverting them from a priority theatre in the Sino-American rivalry, with a gradual redeployment of assets towards the Central Command (CENTCOM) theatre. In fact, this reduction in the US Indo-Pacific Command (USINDOPACOM) raises concrete questions about the sustainability of US deterrence in the region, with direct implications for the Taiwan scenario. In a potential conflict escalation, therefore, the shift in US focus could signal Washington’s difficulty in managing multiple operational theatres simultaneously. This would represent a vulnerability, whereby an actor perceived as incapable of providing reliable protection could see its credibility with allies undermined.
Thus, the war in Iran represents a source of various strategic developments for China. First and foremost, there is a relatively limited economic risk in the energy sector in the short term; however, this could become a critical factor should the conflict drag on. At the same time, if the war were to continue, it would be reasonable to assume that Chinese investments in the area could be compromised and that Beijing’s presence in the region would need to be redefined. Likewise, the US operation in the Middle East is diverting Washington’s political and military attention away from the Indo-Pacific, potentially leading to less consistency in the implementation of strategies to contain China and a slowdown in initiatives to strengthen US partnerships in the region. From this perspective, Beijing would appear to be adopting a wait-and-see strategy, prepared to bear and contain energy and trade costs in exchange for the gradual absorption of US resources in the Middle East. This strategy, however, is not without its drawbacks. From this perspective, in fact, a prolonged disengagement exposes the PRC to the risk of a gradual weakening of its network of strategic partners, including Venezuela and Iran.