An oil tanker unloads crude oil at a terminal at the port in Qingdao, in China's eastern Shandong province on March 8, 2026.
BEIJING — Rising oil prices triggered by the conflict in Iran are projected to have a diminished effect on China compared to prior years, thanks to the country's substantial crude reserves and a diversification of energy sources that include renewables.
As the cost of oil exceeded $100 a barrel for the first time in four years, analysts from OCBC suggested that China may be "less sensitive to a prolonged closure of the Strait of Hormuz than many of its Asian peers."
Analysts noted, "China has accumulated one of the world's largest strategic and commercial crude reserves," and remarked, "Its rapid transition toward electric vehicles and renewable energy provides an additional structural hedge."
As of January, China was estimated to possess approximately 1.2 billion barrels of onshore crude stockpiles.
This reserve, equivalent to about 3 to 4 months of supply, will cushion the economy temporarily, Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations, commented on CNBC's "Squawk Box Asia."
Doshi stated, "China has taken the last 20 years to reduce some of its dependence on maritime oil flows," emphasizing that new overland oil pipelines and a shift towards renewables mean the country now only relies on the Strait of Hormuz for about 40% to 50% of its seaborne oil imports.
China aims to increase the share of non-fossil fuels in total energy consumption to 25% by 2030, up from 21.7% in 2025.
The Strait of Hormuz is a critical maritime route connecting the Persian Gulf to the Arabian Sea. It is a narrow passage bordered by Iran to the north and Oman and the United Arab Emirates to the south. According to Kpler, roughly 31% of the world's seaborne oil, or around 13 million barrels a day, was transported through the Strait last year.
However, oil shipments via the Strait constitute only 6.6% of China's entire energy consumption, as per Nomura's chief China economist Ting Lu.
Natural gas imports through this route account for an additional 0.6%, he noted.
This strategic evolution over two decades has positioned China uniquely in the global energy landscape.