Tehran's Footprint on Chinese Security: Beijing and the Race for New Global Energy Corridors

Beijing, June 25, 2025 – The People's Republic of China, the world's largest energy consumer, is currently facing a potential crisis in its supply security. Its inherent and massive reliance on external energy sources makes it extremely vulnerable to fluctuations in global markets and, increasingly, to geopolitical tensions destabilizing its traditional maritime routes. Recent events, such as the conflict between Israel and Iran, have amplified this vulnerability, highlighting the inherent fragility of oceanic supply lines.

In this context of growing instability, a statement by US President Donald Trump has added another layer of complexity. Trump stated that China could continue to buy oil from Iran, while "hoping" it would also buy from the United States. This seemingly conciliatory move is a clear message to Beijing: on one hand, it acknowledges the reality of China's energy demand and the difficulty of imposing a total blockade; on the other, it attempts to reassert American influence over global energy flows and perhaps gain leverage for future negotiations. For Xi Jinping, the message is twofold: a potential "blessing" to access discounted crude, but also a warning about the volatility of US policy and the need to strengthen China's energy autonomy.

What happened in the Middle East has clearly "scared" Beijing, forcing it into a rapid and profound re-evaluation of its strategies. The Chinese leadership is now acutely aware of the risks associated with its vulnerable oceanic supply lines and is trying to take countermeasures to mitigate them. Although a strategic reorientation towards greater land-based supply is underway, adapting a system of this magnitude is neither an easy nor a quick process, requiring massive investments and complex diplomatic maneuvers.

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The Problem of Maritime Routes: Known Risks and Evasion Strategies

China is fully and acutely aware of the risks posed by its current energy supply model, particularly its overwhelming reliance on maritime routes for oil (approximately 90% of imports in 2024) and a large share of LNG via sea. This vulnerability is linked not only to regional tensions but also to critical geographical choke points.

Reliance on maritime routes, especially those passing through strategic bottlenecks like the Strait of Hormuz (through which about 45% of China's total oil imports transit), exposes the country to disruptions due to conflicts, piracy, or blockades. The recent conflict between Israel and Iran amplified this awareness, demonstrating how quickly supply lines can be threatened and pushing Beijing to an immediate reaction to mitigate these dangers. Iran itself has, in the past, threatened to close the Strait of Hormuz, exposing a systemic fragility for global energy flows.

But the critical points are not limited to the Middle East. China faces other crucial choke points along its maritime routes. The security of the waters surrounding Taiwan and the South China Sea is of vital importance. Any escalation in these areas, considered by Beijing as part of its sphere of influence but disputed by other regional and international actors, could jeopardize China's oil acquisition. A naval blockade, even partial, or a conflict in the Strait of Malacca or near Chinese coasts, would have devastating consequences for the country's energy imports.

Added to this are the risks associated with international sanctions. Although President Trump's recent statement seems to ease US pressure on Chinese imports of Iranian oil, the volatility of US foreign policy is well-known. A potential reintroduction or tightening of sanctions would force shipping and insurance companies to navigate a sea of legal and financial uncertainty, increasing costs and logistical difficulties. The risk of ship seizures or supply interruptions by third parties is never entirely ruled out.

In this context of risk awareness, China has developed sophisticated mechanisms to circumvent US sanctions against Iranian oil. Beijing has long been the primary buyer of Iranian crude, with imports that, while not appearing in official customs statistics (due to sanctions), are estimated to exceed one million barrels per day, representing about 95% of Iran's total oil exports. These transactions often occur outside traditional financial channels, using Chinese currency rather than US dollars. Much of this oil is bought by small independent refineries ("teapots") less exposed to Western sanctions. For transport, Iran relies on a vast "ghost fleet" of old tankers, often acquired from unknown intermediaries, that operate by turning off their transponders to become invisible to tracking systems. These vessels make very few trips per year, but the profits for owners involved in this clandestine trade are substantial. The oil is sold at significant discounts, making it extremely attractive to Chinese buyers.

The Policy of Trump: An Opportunity or a Trap?

Trump's statement, allowing China to continue buying Iranian oil while "hoping" it also buys from the United States, is a matter of great complexity. While on one hand it offers Beijing a kind of "blessing" to access Iranian oil, potentially at advantageous prices given the previous sanctions regime, on the other hand it raises questions about the real stability of this position. Is it a move to ease pressure on an unstable Middle East, or an attempt to tie China into a broader energy game with the United States?

For China, the opportunity to buy oil from both Iran and the United States could represent a golden opportunity to further diversify and balance its sources, reducing reliance on a single supplier. However, the volatility of US policy suggests that Beijing cannot afford to put all its eggs in one basket, be it the Iranian maritime one or the potential US one.

Beijing's Urgent Response: National Interests and the Landward Push

China's reaction to Trump's statements has been, predictably, measured but firm. Guo Jiakun, spokesperson for the Chinese Ministry of Foreign Affairs, clarified that "China will take legitimate measures to safeguard its energy security based on its national interests." This statement, while reiterating Beijing's sovereign decision-making, reflects its awareness of the risks and its willingness to pursue a pragmatic strategy.

The recent conflict between Israel and Iran has acted as a catalyst, prompting Beijing to deeply reconsider oil and gas supplies from the region. According to Rystad Energy, about 30% of China's natural gas imports come as LNG from Qatar and the United Arab Emirates, passing directly through the Strait of Hormuz. Even with hostilities suspended, the instability has pushed China to seek safer alternatives. "The volatility and unpredictability of the military situation have shown the Chinese leadership that the stability of land-based pipeline supplies offers geopolitical advantages," said Alexander Gabuev, an expert on China-Russia relations. "This scenario has evidently "scared" Beijing, which now feels compelled to diversify and strengthen its land-based supply routes to reduce reliance on vulnerable maritime routes."

Among the solutions adopted by Beijing to mitigate these risks and reduce its dependence on the US dollar, another key strategy is the expansion of renminbi (yuan) payments for oil and gas purchases. This move is crucial for China, as it allows it to circumvent the dollar-dominated financial system, making it less vulnerable to secondary sanctions and currency fluctuations. While full details are often confidential, it is known that Russia has become the primary partner in this context, increasingly selling oil and gas to China in yuan following Western sanctions. Iran has also historically accepted yuan payments for its oil, given its exclusion from the dollar-based SWIFT system. Other countries, particularly in Central Asia and among BRICS members, are exploring or have already implemented agreements for using local currencies or renminbi for energy trade, contributing to the yuan's internationalization and creating an alternative to dollar hegemony.

Finally, a fundamental pillar of China's energy security strategy is the investment in Strategic Petroleum Reserves (SPRs). By accumulating vast crude oil stocks, Beijing aims to create a buffer against sudden supply shocks or route disruptions. This gives the country time to react to potential crises, reducing the immediate impact on its economy.

The Pipeline Alternative and the Arctic Route: A Conduit to Central Asia and Russia

Beijing's internal discussions must consider alternatives to traditional maritime supplies. The most logical and strategic option is the expansion and construction of land-based pipelines, coupled with the development of new, less conventional maritime routes.

Central Asia: An Energy, Commercial, and Geopolitical Pillar

Central Asia represents an opportunity of paramount strategic importance for China, not only for energy security but also for market diversification and strengthening its regional influence. President Xi Jinping's recent visit to Kazakhstan on June 16 reasserted Beijing's ambitions to expand its influence and deepen energy and infrastructure ties with resource-rich regional states. On the sidelines of a summit in Astana, Xi held closed-door meetings with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The visit, strategically timed with the G7 summit in Canada (which discussed Beijing's growing geopolitical and economic weight), underscored Central Asia's importance for China.

In energy terms, the region is crucial. Turkmenistan is already a key supplier of natural gas to China via the Central Asia-China gas pipeline, and Beijing seeks to further strengthen this cooperation. In separate talks, Xi specifically called for strengthening cooperation with Turkmenistan in the gas sector and expanding law enforcement and transport links across the region. Kazakhstan, for its part, contributes oil supplies and is exploring new energy partnerships, as evidenced by its decision to return to nuclear energy after more than two decades, choosing both Russia's Rosatom and China's CNNC to lead separate consortia for its first plants. This strategic move allows Astana to balance interests, strengthening ties with both Moscow and Beijing while diversifying technology and investment.

Beyond energy, trade relations with Central Asia serve several strategic purposes for Beijing. Trade volumes have already reached record highs: last year, volumes hit $127 billion, and in the first five months of 2025, trade between China and Central Asia reached 286.42 billion yuan (approximately $39.5 billion), a 10.4% increase year-on-year. This growth is not just economic but also geopolitical. Central Asia serves as an outlet market for China's excess production, a crucial aspect during a period of trade wars and slowing Western demand. Chinese products, from electronics to infrastructure, find a receptive market in these countries, strengthening the region's economic dependence on Beijing.

Kazakhstan is also solidifying its position as a crucial transit hub for the BRI. Over 80% of China's overland freight transport to Europe passes through its territory. The Trans-Caspian International Transport Route (TITR), or Middle Corridor, connecting China and Europe by bypassing Russia, saw a 60% increase in 2024, reaching 4.5 million tons, with forecasts to reach 10 million tons by 2030. The opening of the Zhetysu container terminal in Almaty, jointly developed with China, further strengthens this key logistical infrastructure.

Analysts point out that China's advance in Central Asia aligns not only with energy and commercial goals but also with its priorities for stabilizing its western border regions, such as Xinjiang. However, this growing reliance on Central Asia also introduces new risks: the construction and maintenance of vast pipeline networks across difficult and politically complex terrains require substantial investment and considerable logistical effort. Furthermore, the internal political stability of these countries, ethnic or religious tensions, and the potential influence of other regional powers (like Russia) could threaten the security of new land routes and Chinese investments.

Russia: The Growing Strategic Energy Partner and the Northern Sea Route

The energy partnership between China and Russia is already robust, with major pipelines like the ESPO (Eastern Siberia Pacific Ocean) transporting Russian oil to China. Analysts state that China is looking to further increase its oil purchases from Russia. The recent Middle East conflict has prompted Beijing to renew its interest in the Power of Siberia 2 gas pipeline and expand imports of Russian natural gas. Talks on this project had long been stalled due to disagreements over pricing and ownership, as well as China's reluctance to over-rely on Russia for energy. However, the demonstration of geopolitical volatility has prevailed.

Further strengthening this network, through new pipelines or increased capacity of existing ones, would offer an additional secure and reliable land-based supply route. Russia, with its vast reserves and geographical proximity, represents a natural partner for China's energy diversification, reducing reliance on Middle Eastern suppliers and maritime vulnerabilities. As the Trump administration seeks to "create a rift" between Moscow and Beijing, China is looking to deepen its partnership with Russia, and reviving the stalled pipeline project could help achieve this goal. However, this partnership is not without its own risks, given Russia's growing dependence on China and the implications of excessive Chinese influence over Moscow.

Beyond land pipelines, Beijing is actively developing the Northern Sea Route (NSR) with Russia for gas and oil transport. This route, which runs along Russia's Arctic coast, offers a strategic alternative to traditional southern passages, which are notoriously congested and subject to geopolitical risks. Its attractiveness has grown exponentially due to climate change, which has made the Arctic ice increasingly navigable for longer periods of the year. The main reasons why China is investing in this route are manifold:

• Route Diversification: It reduces reliance on vulnerable choke points like Malacca, Hormuz, and the Suez Canal.

• Reduced Transit Times: The NSR can significantly cut travel times between Asia and Europe compared to traditional routes, saving days or weeks.

• Security: Being a less congested route and primarily controlled by Russia, it offers greater security compared to high-tension geopolitical areas.

• Access to Arctic Resources: The Arctic is rich in natural resources, and cooperation with Russia on the NSR opens opportunities for joint development of gas and oil fields.

It's important to note that the Northern Sea Route is primarily a maritime route and does not connect directly to the Power of Siberia gas pipeline. The latter is a land-based pipeline transporting gas from Eastern Siberia to China. The NSR, conversely, is used for shipping LNG (e.g., from Russian projects like Yamal LNG) and oil, offering an additional maritime supply channel, but via a different and safer route than the southern ones.

China's Energy Reliance: How Much Energy Arrives by Sea and How Much by Land?

Analyzing the breakdown between maritime and land-based supplies is fundamental to understanding China's vulnerabilities and strategies.

For crude oil, 2024 data indicates that approximately 90% of China's imports arrive by sea. The remaining 10% or so comes overland, primarily from Russia (via the ESPO pipeline) and Kazakhstan. This highlights an overwhelming predominance of maritime routes, making Beijing extremely exposed to disruptions in areas like the Strait of Hormuz.

For natural gas, the picture is more balanced but still significantly reliant on sea transport. In 2023, LNG imports (by sea) accounted for approximately 9.5 billion cubic feet per day (Bcf/d), while pipeline imports (by land) reached about 6.5 Bcf/d. Projections for 2025 indicate that pipeline imports will reach approximately 84.9 billion cubic meters (bcm), while LNG imports will exceed 100 bcm, confirming that sea-borne LNG remains a larger component but with significant growth in land-based supplies.

Currently, China's main oil suppliers (2024 data, with estimates updated to 2025 where available) include:

• Russia: Has become the leading crude supplier to China, with average imports of about 2.1-2.2 million b/d in 2024, up 1% from 2023.

• Saudi Arabia: Second largest source, with about 1.5-1.6 million b/d in 2024, though down 9% from 2023.

• Malaysia: An important transit hub for sanctioned oil (including Iranian and Venezuelan), with imports surging 28% to 1.41 million b/d in 2024.

• Iraq and United Arab Emirates: Other major Middle Eastern suppliers, with significant imports.

• Iran: Despite official sanctions, China remains its primary buyer.

Regarding natural gas (2024 data, with 2025 forecasts):

• Australia and Qatar: The largest suppliers of LNG. In 2024, Australia supplied 34% of Chinese LNG, and Qatar 24%.

• Turkmenistan: Primary supplier via land pipeline through the Central Asia-China gas pipeline network.

• Russia: Pipeline imports are rapidly growing, particularly through Power of Siberia 1.

Conclusions: The Pursuit of Sustainable Balance in a Fluid Context

In summary, China is fully and acutely aware of the risks inherent in its current energy supply model, particularly its heavy reliance on maritime routes for oil and the large volume of LNG arriving by sea. Recent geopolitical tensions, especially those involving Iran, have magnified this awareness, "scaring" Beijing and prompting it to reconsider its vulnerability and the implications of its sanctions evasion practices, compelling it to take swift action. The rhetoric of "prioritizing national interests" is not merely a platitude; it reflects a profound and urgent strategy for energy security. This strategy, while it may continue to include Iranian oil purchases for immediate economic and geopolitical reasons, will increasingly pivot towards diversifying sources and routes.

Land-based pipelines, especially those originating from Central Asia and Russia, along with the development of the Northern Sea Route, are key for China to secure a more stable future for its energy supply, making it less vulnerable to turbulent maritime geopolitics. Beijing's real challenge will be to balance the tactical opportunities presented by a still-relevant Iran as a supplier with the strategic imperative to build a robust and shock-proof supply network, simultaneously strengthening its strategic partnerships with Moscow and Central Asian countries. Meanwhile, Beijing continues to invest massively in domestic energy production, both through fossil fuel extraction and, increasingly significantly, through the accelerated development of renewable energies. This dual approach aims to reduce overall import dependence in the long term, providing an additional layer of security.

An adaptation towards greater security in land-based and Arctic supplies is necessary, but its implementation will be neither easy nor quick. It demands immense investment and careful diplomatic navigation in a context where even new dependencies carry inherent risks. The game for China's energy security is open, and its outcome will depend on Beijing's ability to navigate the waves of international politics and forge new routes, both by sea and by land, in an ever-evolving global landscape.