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By Micah McCartney
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Global shipping has ground to a near halt in the Strait of Hormuz in the Persian Gulf since the U.S. and Israel launched airstrikes against Iran on Saturday.
Iran has declared the waterway effectively closed, stranding more than 100 vessels in the strait, through which roughly a quarter of the world’s seaborne energy passes each day. Oil prices hit a 14-month high of $82 Monday and remain elevated as the conflict widens, with Tehran's retaliatory strikes expanding to hit oil refineries in Gulf neighbors hosting U.S. bases.
“With no quick de-escalation in sight, the Strait of Hormuz effectively closed and Iran showing a willingness to target energy infrastructure in the region, upside risks remain and they grow the longer the conflict drags on,” IG Australia market analyst Tony Sycamore said, per Reuters.
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The region with the most exposure to disruptions in the Strait of Hormuz is Asia, which sources more than 46 percent of its seaborne crude from the Middle East, particularly China and India.
China, a longtime ally of the Islamic Republic, said the U.S.-Israeli offensive violated international law and has called on all sides to halt the fighting, warning of global knock-on effects.
"Energy policy is vital to the global economy and ensuring unfettered supply is the responsibility of all," Chinese Foreign Ministry spokesperson Mao Ning told reporters Monday. "China will do what is necessary to ensure its energy security."
The following list is based on official data from China's General Administration of Customs (GAC), with the exception of Iran. Newsweek reached out to the Chinese, Iranian and Malaysian foreign ministries by email with requests for comment.
China's Top Sources of Oil
1. Russia - 18 percent
2. Saudia Arabia - 14 percent
3. Iran* - 13 percent (est., Kpler)
4. Malaysia** - 11 percent
5. Iraq - 11 percent
6. Brazil - 8 percent
7. United Arab Emirates - 7 percent
8. Oman - 6 percent
9. Angola - 5 percent
10. Kuwait - 3 percent
*Although Beijing has reported no Iranian oil imports since 2022, it is widely believed to be a top buyer, with much of that oil being shipped through unregistered ships of the so-called "shadow fleet." China accounted for an estimated 80 percent of Iran’s crude exports last year, according to Brussels-based analytics firm Kpler.
** Malaysia’s position on the list reflects its role as a transshipment hub for relabeled Iranian crude bound for China. Neither China nor Malaysia recognizes the U.S.' unilateral sanctions as legitimate.
China's Buffers
Analysts point out that in the near term, China enjoys some insulation through its vast strategic petroleum reserves, estimated to exceed 1 billion barrels.
“The large volume of oil China has in storage means it would likely be able to weather any multi-month disruption of its imports from Iran and Venezuela, which supplied about 15 percent of China’s crude imports last year,” wrote Erica Downs, senior research scholar at Columbia University’s Center on Global Energy Policy, in a January analysis.
China also could reduce its exposure to oil shock by boosting supply from other sources such as Russia. Chinese imports of discounted Russian oil hit a record high of 2.07 million barrels per day in February, according to preliminary estimates by Vortexa Analytics. Despite China relying heavily on coal power, it is also a leader in green energy.
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Yet prolonged disruption or seaborn petroleum products would impact China's construction industry and constrain operations of the People’s Liberation Army at a time when Beijing has its sights on naval dominance in the Pacific.
“China’s anode-grade demand presents an additional risk if procurement intensifies,” Kpler analyst Firat Ergene wrote in an analysis.
While coal could absorb part of the shock, technical blending constraints limit substitution, as most cement producers have already reduced petcoke’s (petroleum coke) share in their fuel mix amid cheaper coal prices.
Concerns are mounting an increasingly desperate Tehran could strike energy infrastructure around the Strait of Hormuz. Commercial insurers have already begun withdrawing or sharply hiking coverage for transits the strait, adding to the uncertainty.
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