Beijing, China – In a direct and serious reflection of the impact of the Iranian war on global energy balances, official Chinese data and intelligence reports revealed a sharp and unprecedented decline in China’s energy sector during April.
The escalation of the armed conflict and the closure of the Strait of Hormuz have choked crude oil supplies to the world’s largest oil importer. As a result, China’s energy security has been put to its most severe test in years.
The Strait of Hormuz: A severed artery choking imports
Reuters reported that China’s oil imports fell in April to their lowest level in nearly four years. This collapse is a direct result of the closure of the Strait of Hormuz, the world’s most important waterway. This has disrupted Beijing’s supply chains.
China relies on the Middle East for nearly half of its crude oil needs. Consequently, the disruption of traffic in the strait has led to a historic decrease in the number of oil and refined product tankers arriving at Chinese ports.
Shocking figures from customs and “Kepler”
According to customs data released on Saturday, crude oil imports fell 20% in April to 38.5 million metric tons compared to the previous year. This is the lowest level recorded since July 2022. While official Chinese data does not differentiate between seaborne and pipeline oil, data from ship-tracking firm Kpler paints a much bleaker picture. Seaborne crude oil imports reached only 8.03 million barrels per day, the lowest figure in nearly four years.
Domestic retreat: Fuel exports at their lowest level in a decade
The impact wasn’t limited to imports; it extended to Beijing’s export policy. As unrest in the Middle East continued, the Chinese government tightened controls on its exports of refined products, such as gasoline and jet fuel, in a proactive effort to protect its domestic market and secure its strategic reserves.
This retrenchment policy led to a drop in refined oil product exports in April to 3.1 million tons, the lowest level in nearly a decade. This represents a decline of almost a third compared to March.
Strategic challenges facing the Chinese dragon
These figures present the Chinese leadership with a strategic dilemma. The continuation of the Iran-Iraq War and the closure of vital waterways not only threaten economic growth but also push Beijing to seek costly alternatives outside the Gulf region. With the Strait of Hormuz remaining largely inoperable, China’s energy crisis appears poised to worsen. This could impact global fuel prices and Beijing’s ability to maneuver in international politics related to the ongoing conflict.
