Analysts predict that the current crisis in the Middle East may push China towards closer cooperation with Russia. This is related to the potential loss of accessible Iranian oil and possible long-term disruptions in energy markets.
According to experts, Xi Jinping's government, despite concerns about excessive dependence on Russia, is likely to seek to strengthen ties with the Kremlin. Currently, Russia is the largest supplier of crude oil to China, accounting for about 20% of its imports.
Neil Beveridge, head of China energy research at Bernstein in Hong Kong, stated: "One of the main outcomes of this situation will be the strengthening of the energy partnership with Russia — both in oil and gas. If Iran becomes more pro-Western or concerns about its instability arise, this will only enhance the alliance between Russia and China."
Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at the French investment bank Natixis, noted that the military operation by the U.S. and Israel against Iran has far more serious implications for China's energy sector than the kidnapping of Venezuelan leader Nicolas Maduro in January. She pointed out that Venezuela accounted for only about 4% of China's maritime oil imports.
Garcia-Herrero also added that Putin may try to raise the prices of oil and gas offered to China, as Beijing is currently in a more vulnerable position.
Some measures are already being taken: according to an oil trader from the port of Ningbo, major Chinese oil companies have increased purchases from Russia in recent weeks. There is also information about the state-owned company CNPC's intentions to resume operations at a mothballed refinery in Dalian, which will allow for increased processing volumes of additional supplies from Russia.
In the long term, the trader noted that with the melting of polar ice, new Arctic trade routes are opening, which will accelerate and reduce the cost of transporting oil from Russia to Europe.
Analysts also believe that Beijing may accelerate the construction of the "Power of Siberia-2" gas pipeline, which will supply natural gas from northwestern Russia through Mongolia to China. This multibillion-dollar project is expected to be completed by the early 2030s.
The article "China will rely on Russian oil as the crisis around Iran disrupts supplies" was first published on K-News.
