October 12, 2023 [EnergyPortal.Eu]- China, the largest oil importer from Saudi Arabia and Iran, faces significant risks if the conflict in Israel and Gaza escalates further. Despite portraying itself as a neutral player in the Middle East, China has a high stake in the region, primarily due to its heavy reliance on oil imports.
As the second-largest oil consumer in the world, China’s oil imports have surged in recent years. Over 72% of its oil needs are now fulfilled through imports, with half coming from Saudi Arabia and a significant portion from the Persian Gulf. China has also increased its oil imports from Iran, a country known to support Hamas, the group responsible for the recent attack on Israel.
The dependence on foreign oil has become a major concern for China, with energy security being a top priority for its leaders. Although China has invested in electric vehicles and dominates the production of electric cars, gasoline consumption remains high. China is also the world’s leading producer of petrochemicals, which further contributes to its oil demand.
China’s reliance on oil imports is unlikely to decrease substantially, making it highly exposed to the ongoing instability in the Middle East. While China officially does not acknowledge buying oil from Iran, industry experts have documented its purchases. Iranian oil, despite international sanctions, is cheaper than Russian oil, prompting Chinese refineries to shift their purchases.
Building a natural gas pipeline from Russia to China could potentially allow for oil shipments alongside it. However, the commercial viability of such a project remains uncertain. In the meantime, China has been constructing storage tanks at a rapid pace to store its oil reserves. Although the exact figures are undisclosed, it is believed that China’s oil reserves are considerable.
While energy security plays a crucial role in China’s decision-making, it is not the sole factor. China has maintained friendly relations with the Islamic world, even as it faces criticism for its treatment of Muslim minorities in Xinjiang. The complexities of China’s involvement in the Middle East reflect the country’s strategic concerns and global interests.
12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data