When conflict erupted in Iran in late February, many analysts viewed China’s energy security as highly vulnerable. As the world’s largest crude oil importer, China depends on imports for over 70 percent of its oil consumption, with nearly half sourced from the Middle East. The potential disruption of the Strait of Hormuz, a critical chokepoint for global oil flows, compounded these concerns, especially following recent U.S. restrictions on Venezuelan oil exports. However, rather than facing a debilitating oil shock, China proved remarkably resilient, highlighting the effectiveness of its long-term strategic preparations.

China’s transition from an oil self-sufficient nation to a major importer began in 1993, driven by rapid economic expansion. In response to vulnerabilities exposed by heavy reliance on Middle Eastern oil, Chinese leadership initiated a comprehensive strategy to diversify supply and reduce exposure to geopolitical risks. This approach included expanding crude oil reserves, now estimated to be the largest worldwide, matching the combined stockpiles of the United States and Japan. Additionally, China has aggressively promoted electric vehicles, becoming the global leader in that sector, and relies heavily on domestically produced electricity generated from coal, nuclear, hydropower, wind, and solar.

The recent Iran conflict tested this strategy under real-world conditions. Although oil prices surged due to disruptions in the Strait of Hormuz, China avoided a crisis akin to the 2021 coal shortage. Domestic stockpiles were deployed, export restrictions on transport fuels were imposed, and higher fuel prices encouraged shifts toward public transportation and electric mobility. Unlike several other Asian nations that resorted to fuel rationing and price hikes, China’s economy continued operating without significant interruption. Its cautious approach to purchasing oil on the global market also helped temper price spikes, incidentally easing the impact of higher fuel costs in the United States.

China’s success underscores the government’s view of energy as a core element of national strength, comparable to industrial and military power. In 2021, Chinese authorities articulated a goal of becoming an “energy powerhouse” capable of delivering reliable, abundant power while reducing dependence on fossil fuels. This ambition was reinforced by state media commentary emphasizing energy security as essential for China’s advantage in the ongoing strategic competition with the United States, particularly in sectors like advanced manufacturing and artificial intelligence.

The country’s newest energy policy, adopted earlier this year, reinforces this vision by boosting renewable and nuclear capacity while maintaining coal as a critical stability source. Investments are also being made in grid modernization, energy storage, and transmission infrastructure to support the growing electricity demand of urban centers and industry.

While the United States retains a dominant position in oil and gas production, with extensive reserves and export capabilities, its electricity infrastructure faces challenges in meeting rapidly rising power demands from emerging industries. The recent test of China’s energy system suggests a shift in global energy dynamics: from reliance on control over oil flows toward control of electrified industrial ecosystems. With its substantial head start in this transition, China is positioning itself as an increasingly influential player in the geopolitical competition over energy and technology.