What the war in Iran means for China
you are currently viewing:What the war in Iran means for ChinaMarch 17, 2026-China is relatively inured to the Iran conflict, but less external demand could hit its exports and its international partnerships may be undermined While Beijing's massive oil stockpiles and diversified sourcing offer short-term protection, a prolonged conflict over Iran could exacerbate domestic economic pressures and undermine China's global goals. Access to Iranian oil cut off Iran has long served as a vital, discounted source of energy for China. This has especially been the case since 2021 when the Iran-China 25-year cooperation agreement was signed, securing a $400 billion of oil at below market prices for China, in exchange for investment in Iran's infrastructure and security cooperation1. By the end of 2025, China was importing up to about 1.4 million barrels per day (mbd) from Iran, representing 13 percent of its total crude imports and some 80 percent to 90 percent of Tehran’s oil exports2. Iranian oil was often rerouted to circumvent US sanctions3. To avoid the reputational and financial risk from importing sanctioned oil, this oil was mainly bought by small, private 'teapot' refineries, rather than major Chinese state-owned oil companies. Source: bruegel.org |
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