An oil tanker unloads crude oil at a terminal at the port in Qingdao, located in China's eastern Shandong province, on March 8, 2026.
BEIJING — Following the recent escalation in the Iran conflict, global oil prices have seen a significant rise, passing the $100 per barrel mark for the first time in four years. However, China is anticipated to experience less of an impact compared to previous instances due to its substantial crude oil reserves and diversification in energy sources, including renewables.
Analysts from OCBC highlighted that China might be "less sensitive to a prolonged closure of the Strait of Hormuz than many of its Asian counterparts." They explained that China boasts one of the largest strategic and commercial crude reserves globally and is undergoing a swift transition to electric vehicles and renewable energy sources, which serves as a structural hedge against oil price shocks.
As of January, China possessed approximately 1.2 billion barrels of onshore crude reserves. These reserves, equivalent to three to four months of consumption, are expected to buffer the economic impacts of soaring oil prices, according to Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations, who discussed the issue on CNBC's "Squawk Box Asia."
"Over the past 20 years, China has worked to reduce its reliance on maritime oil flows," Doshi noted. This effort includes the development of new overland oil pipelines and a shift towards renewable energy, implying that currently, only about 40% to 50% of China’s seaborne oil imports transit through the Strait of Hormuz.
China aims to raise the proportion of non-fossil fuels in its total energy consumption to 25% by 2030, up from 21.7% planned for 2025.
The Strait of Hormuz, a pivotal waterway connecting the Persian Gulf to international shipping routes, narrows between Iran in the north and Oman and the United Arab Emirates in the south. Last year, it facilitated about 31% of the world's seaborne oil flows, approximately 13 million barrels of crude per day, as reported by Kpler.
However, oil from this route constitutes only 6.6% of China’s total energy consumption, stated Ting Lu, chief China economist at Nomura, while natural gas imports through the strait cover a mere 0.6%.
This situation underscores a transformative strategy spanning two decades, which has allowed China to occupy a unique place in global energy markets.