China Commits to Protecting Its Energy Security Following US Movements in Venezuela and Iran

SadaNews - China is moving to enhance the security of its energy supplies amid increasing threats to oil and gas flows following US military actions in Venezuela and Iran, which have driven prices up and raised concerns about shipment flow, particularly from the Middle East. This escalation places additional pressure on the world's second-largest economy, which relies significantly on energy imports to fuel its industrial and consumer growth.
  
 The Chinese Foreign Ministry stated that Beijing will take "necessary measures" to ensure its energy security as fears of global supply disruptions rise. Ministry spokesperson Mao Ning asserted during a regular press conference on Tuesday that "energy security is very important for the global economy, and all parties must ensure stable and smooth supplies," according to Reuters, adding that China "firmly opposes the use of force to violate the sovereignty and security of countries."

China's Crude Supplies

These statements come amid escalating tensions in the Middle East and Latin America, two regions that represent a crucial pillar for China's crude oil supplies.

China is the world's largest oil importer, significantly relying on supplies coming from the Middle East, where analysts estimate that Iranian barrels account for about 13% of China's seaborne crude imports by 2025.

In contrast, Venezuela represents an important source in South America, with Venezuelan crude shipments accounting for about 4% of China's seaborne imports in 2025, as some independent Chinese refineries continue to rely on these low-priced barrels.

Despite a decline in flows from Venezuela in recent months due to US restrictions, any further military escalation could increase pressure on the remaining supplies, as Beijing seeks to neutralize geopolitical risks to its energy security.

Chinese Pressure to Keep the Strait of Hormuz Open

A report by Bloomberg indicated that Beijing pressured Tehran to avoid any steps that could disrupt shipping traffic in the Strait of Hormuz, including targeting oil and gas tankers.

This passage is vitally important for China, not only because of Iranian oil but also due to its substantial reliance on liquefied natural gas supplies from Qatar, which provides about 30% of its super-cooled fuel imports.

Oil and Gas Prices Spike Due to Tensions

These moves came after a sharp rise in energy prices, reflecting that concerns extend not only to the likelihood of supply disruptions but also to the cost of these supplies. Brent crude rose by more than 13% on Monday to surpass $82 per barrel, as markets priced in scenarios of shipping disruptions, putting direct pressure on China as the world's largest crude oil importer.

According to an analysis by Bloomberg Economics, the ongoing conflict in Iran has added about $15 to the price of Brent crude, with nearly two-thirds of that increase occurring after clashes broke out on February 28, indicating a rise in the geopolitical risk premium in the market.

European gas prices also surged by about 70% since Friday's close, marking one of the most severe volatility waves since the 2022 energy crisis, enhancing concerns that the price shock might spill over to major import-dependent economies, particularly China.

Wider Implications for the Global Economy

Oil represents the main channel through which any military escalation could impact the global economy. Continued rising prices could pressure major importers such as China, India, and Europe at a time when the global economy is already facing uncertainty arising from geopolitical tensions.

Estimates suggest that a complete halt of Iranian supplies could push prices up by about 20%, while Brent crude could soar to much higher levels if the Strait of Hormuz were to close.