Iran has announced the closure of the Strait of Hormuz, putting approximately 20% of global oil and gas transportation at potential risk of disruption. Beijing is reportedly pressuring Iran to keep this critical energy passage open. A recent symposium held by China’s National Energy Administration emphasized the importance of developing the green fuel industry. Developing green fuels is conducive to replacing oil and ensuring energy security.
According to the official website of China's National Energy Administration, the recently organized “Green Fuel Industry Development” symposium noted that promoting the green fuel industry facilitates substitution of oil and guarantees energy security, helps reduce carbon emissions and promotes green development, facilitates the non-electric utilization and consumption of new energy, and enhances new development momentum. It is an important direction for fostering new quality productivity in the energy sector.
The meeting also stressed the need to adhere to systematic planning, strengthen top-level design and layout; insist on pilot demonstrations to explore scientific industrial development models; continue to drive innovation to enhance industrial competitiveness; optimize the environment to strongly support large-scale industrial development; and be guided by demand to coordinate domestic and international markets.
About 40% of China’s oil imports pass through the Strait of Hormuz, and about 30% of its liquefied natural gas imports come from Qatar and the UAE. According to data from market research firm Kpler, China’s crude oil reserves could last approximately 115 days, and alternative supplies from Russia and Kazakhstan via land pipelines help diversify risks.
According to the Hong Kong Economic Times, Aberdeen Investments emerging market economist Lan Hanmu noted that Iran supplies 1.5–1.6 million barrels of oil per day to China’s non-state-owned refineries, some of which could be offset by Russian oil. China’s oil reserves are estimated at between 1 and 1.5 billion barrels, so the macroeconomic impact of a short-term supply disruption is limited. The risk lies in the possibility of a prolonged interruption of Iranian oil supply or the Strait of Hormuz, which would significantly increase macroeconomic risks for India and China.
Bloomberg previously reported that, according to senior executives at Chinese state-owned gas companies briefed by government officials, Beijing has urged Iran not to target oil and liquefied natural gas transport vessels in the Strait of Hormuz, and to avoid attacking Qatar’s gas facilities. On the 3rd, Chinese Foreign Ministry spokesperson Mao Ning stated that energy security is very important to the world economy, and “all parties have a responsibility to ensure the stable and smooth supply of energy.”