The Energy Siege: The US Stranglehold on Russia, Iran, and Venezuela, and China's Strategy of Evading Sanctions and Transforming Fossil Fuel Dependency into Green Supremacy

Energy is the lifeblood of China's rise, but it is also the most exposed front in its national security. In a global context defined by competition between major powers, the People's Republic of China faces a critical paradox: its industrial and military power depends on resources it does not control and trade routes controlled by its strategic adversaries. With its dependence on oil imports consistently exceeding 70%, Beijing is not only seeking to secure daily supplies, but is also undergoing a fundamental doctrinal transition, moving from a logic of simple "supply stability" to one of "systemic resilience" capable of withstanding, adapting, and recovering from devastating external shocks.

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Beijing's vulnerability is quantifiable and geographically defined. In 2024, China imported over 600 million tons of crude oil, a volume representing 26% of the entire global oil trade. Although Russia has established itself as the leading supplier with a market share of 19.6%, followed by Saudi Arabia at 14.2% and Iraq at 11.5%, the real fragility lies in maritime logistics. About 80% of imported oil and 60% of natural gas travel through southern routes, forcing the Dragon to pass through the "Malacca Dilemma." Chinese strategic simulations paint a grim picture: a blockade of the Strait of Malacca, even if maintained for only six months without corrective action, would reduce imports by 200 million tons, dealing a direct blow to the national GDP of more than 3%.

It is within this context of logistical fragility that the offensive geo-economics of the United States comes into play. Our intelligence analyses indicate that Washington's pressure on Venezuela and Iran is not only motivated by non-proliferation or democracy, but also serves to contain China's energy supply. Sanctions and the threat of armed intervention or naval blockades in the Persian Gulf aim to restrict hydrocarbon flows to Beijing, forcing China to depend on conventional routes controlled by the US Navy. However, China's response to this siege has taken the form of a sophisticated network of sanctions evasion that challenges the Western financial order. Official data show that Malaysia has become China's third largest oil supplier with an anomalous share of 12.7%, a figure that far exceeds Malaysian production capacity and masks a vast deep-water transshipment system. Here, crude oil from Iran and Venezuela is "renamed" before reaching the Shandong terminals, where independent refineries known as "Teapots" process it, providing Beijing with strategic reserves at discounted prices and keeping the economies of US-sanctioned countries alive.

In addition to physical risk, China faces systemic financial risk linked to the hegemony of the dollar. The volatility of oil prices, often linked to fluctuations in the greenback and the Federal Reserve's interest rate cycles, is directly transmitted to the Chinese economy, importing inflation and increasing industrial production costs. To mitigate its exposure to the "strong arm" of US finance and the risk of SWIFT sanctions, Beijing is accelerating the construction of a parallel financial infrastructure. The strategy involves expanding the Cross-Border Interbank Payment System (CIPS) and utilizing the mBridge project for central bank digital currencies, with the aim of settling oil transactions directly in digital Renminbi (e-CNY), bypassing the dollar and making energy flows invisible to Western monitoring.

Looking ahead, Chinese leadership is aware that import diversification and financial maneuvers are only short-term palliatives. The ultimate strategy, outlined as a shift from "diversification" to "localization," aims to radically transform the national energy structure. In the short term, Beijing will continue to exploit the "gray area" of international trade and consolidate secure land corridors through the Belt and Road Initiative, such as the China-Pakistan Economic Corridor and gas pipelines in Central Asia, to circumvent maritime bottlenecks. However, the real "end-game" is technological replacement. The long-term plan involves a massive shift towards electrification, leveraging China's dominance in the photovoltaic supply chain — where it controls over 80% of global production capacity in various segments — and wind power.