Middle East Conflict Escalates: How Will China, the World's Largest Oil and Gas Importer, Weather the Storm? Experts from "Big Three Oil" Think Tanks Share Their Views

After the United States and Israel launched military strikes on Iran, the Strait of Hormuz has effectively been in a state of blockade for over two weeks. Over the past ten days, global energy markets have experienced intense turbulence, triggering a series of chain reactions that impact the world economy. More critically, as the conflict continues, both the US and Iran have issued strong statements regarding the Strait of Hormuz, and the disruption of this oil and gas “artery” shows no signs of ending.

China is the world’s largest importer of oil and natural gas (including pipeline gas and liquefied natural gas). By 2025, China’s dependence on foreign oil will reach 72.7%, and natural gas dependence will be 40%. Amid the global energy storm, how will China, a major buyer of Middle Eastern oil and gas, respond to market shocks and mitigate import risks? At the Bloomberg New Energy Finance (BNEF) Beijing Summit on March 12, senior experts from the think tanks of China National Petroleum Corporation (CNPC), Sinopec, and China National Offshore Oil Corporation (CNOOC) analyzed the situation.

According to 2025 data, one-fifth of global seaborne crude oil passes through the Strait of Hormuz, with nearly 45% of China’s crude oil imports transiting this channel. “By 2025, approximately 4.9 million barrels of crude oil per day will enter China through the Strait of Hormuz. Based on this, about two to three VLCCs (Very Large Crude Carriers) will pass through the strait daily,” said Guo Shengwei, Deputy Director of the Energy Economics Research Institute of China National Offshore Oil Corporation. Iran is controlling the Strait of Hormuz to counter and weaken the impact of US-Iran military strikes. From China’s perspective, the primary concern is the impact of this strait on domestic imports.

Guo Shengwei assessed that, currently, domestic refined oil producers have sufficient crude oil inventories to withstand short-term high oil prices, thanks to years of strategic reserve planning. “Compared to some EU countries and Japan/Korea, China has a stronger capacity to endure this round of high oil prices. As the US-Iran confrontation reaches a stalemate, reopening the strait quickly is essential to dispel market panic. From a bottom-line perspective, companies should also prepare thoroughly for the next 2-4 months.”

“Oil price fluctuations are common, sometimes unpredictable and beyond expectations, ranging from negative prices to over $100 per barrel,” said Cao Jianjun, Chief Expert at Sinopec’s Economic and Technological Research Institute. He emphasized that in the face of uncertainty, China must rely on its own certainty to respond to external unpredictability.

Data from the National Energy Administration shows that domestic crude oil production has exceeded 200 million tons for four consecutive years, reaching a record high of 216 million tons in 2025. “Domestic crude oil output continues to grow, and the incremental oil and gas equivalent has exceeded 10 million tons for nine consecutive years. Although dependence on foreign oil remains high, the sustained growth of domestic supply is the foundation for resisting external fluctuations,” he said.

Cao Jianjun also highlighted the “shock absorption” role of China’s domestic energy reserves and large manufacturing systems. “The crude oil industry chain is very long, and there are alternative industries such as coal-to-oil. Flexible trade systems, load adjustments, and structural reforms can all help China respond to external volatility.”

From the perspective of national energy security, how should we characterize the blockade of the Strait of Hormuz? “I believe it’s not just about volume and price impacts. Essentially, this is the first time in history that the strait has been completely blocked and used as a geopolitical bargaining chip. For countries worldwide, especially Asian importers, this situation is very serious,” emphasized Dai Jiaqian, Chief Economist at China Petroleum Group’s Economic and Technological Research Institute. As Asia relies most heavily on Middle Eastern oil and gas imports, the war premium is particularly high. It is necessary to remain alert: “If such a risk occurs once, could it happen again? We cannot rule out this possibility.”

Dai Jiaqian pointed out that with rising Middle Eastern oil prices and freight costs, Brent crude reaching over $90 per barrel would push China’s import cost to over $130 per barrel. “From a long-term strategic perspective, this is a major challenge.” He also stressed that increasing domestic oil and gas production is the cornerstone of energy security. According to assessments, if international oil prices stay at $80 per barrel and domestic investment plans are in place, an additional crude oil capacity of about 10 million tons per year could be developed from strategic reserves.

“In this incident, China’s strong refining capacity, the world’s largest, ensures a particularly robust supply security because we have stored large inventories during production and transportation to cope with short-term market fluctuations,” Dai Jiaqian suggested. After the Middle East conflict subsides, further increasing domestic refinery utilization and relaxing export restrictions on refined oil could enhance the overall resilience of China’s oil supply chain. In emergencies, export resources can be quickly redirected back to domestic needs.

Jiecheng Energy, a consulting firm,’s Chief Researcher Yan Jiantao previously told The Paper that Iran exports about 1.8 million barrels of oil per day, mainly to China. Domestic independent refineries, which rely heavily on heavily discounted Iranian oil, are most affected by this conflict. “If both Venezuela and Iran’s oil supplies are impacted, China should accelerate rectifying its domestic refined oil market, reorganize independent refineries, and boost refinery utilization rates.”

Recently, Lu Ruchuan, President of China Petroleum Group’s Economic and Technological Research Institute, stated at a report hosted by Fudan Development Institute that as a major oil and gas importer, China has always prepared in advance to strengthen energy security. On one hand, China has established a diversified oil and gas import system, sourcing from Latin America, Africa, Central Asia, and Russia, in addition to the Middle East. For example, annual oil imports from Brazil are about 60 to 80 million tons. Even if Middle Eastern tensions escalate and the Strait of Hormuz transport is blocked, other channels can partially compensate. On the other hand, China continues to strengthen strategic petroleum reserves and increase domestic oil and gas capacity. Currently, China produces 210 million tons of crude oil and 260 billion cubic meters of natural gas annually, ranking sixth in the world for oil production and fourth for natural gas, providing a solid foundation for energy security.