Impact of the US-Iran Conflict on China's Oil Imports

How does the US-Iran conflict affect China’s oil import routes?

The recent military conflicts involving the United States, Israel, and Iran have had varying degrees of impact on global politics, economics, and ideologies. Among these effects, the most significant are the impacts on energy and food prices. So, how does this conflict influence our energy imports? Here, I will share my personal perspective on this issue.

To roughly understand this, we need to look at China’s oil import scale, source structure, external dependence, and import channels. Understanding these basics is essential for analyzing the potential impacts of the conflict.

The data below, unless specified otherwise, comes from the National Bureau of Statistics. Since 2023 data is relatively complete, I will cite that year, as the figures are not significantly different from the latest data.

In 2023, China’s oil imports and exports were approximately 670 million tons and 80 million tons, respectively. Net oil imports can be calculated as about 590 million tons. That year, China’s oil consumption was about 750 million tons.

Knowing these figures, we can estimate China’s oil dependency in 2023 using the formula:

(Net oil imports ÷ Oil consumption) × 100%

Calculating this yields approximately 78.7%.

The chart below shows data from 1993 to 2021 on China’s crude oil and refined oil imports. In 1993, China’s crude oil imports were only 15.67 million tons; by 2004, they increased to about 120 million tons; another 12 years later, around 300 million tons; and after another 7 years, about 500 million tons. The rapid growth in crude oil imports over these 29 years clearly demonstrates China’s fast development and progress.

(Chart: Crude and refined oil import/export volumes from 1993 to 2021, compiled from National Bureau of Statistics data, adapted from Deng Shen’s research on the impact of international economic conflicts on China’s oil import sustainability [D], China University of Geosciences (Beijing), 2023.)

Understanding China’s external dependence on oil only reveals part of the picture regarding energy security. It does not directly show how the US-Israel-Iran conflict might impact China’s oil imports. Therefore, we also need a rough understanding of global oil reserves distribution and China’s import structure.

The following infographic shows the global distribution of oil reserves, with darker colors indicating larger reserves.

The first map covers Europe and the Asian part of Russia. It shows that a significant portion of Europe’s oil reserves are within Russia, which holds nearly 80 billion barrels (about 10.9 billion tons), ranking around eighth globally.

Besides Russia, another concentrated oil and gas reserve area in Europe is the North Sea oil fields (marked within the red circle). To date, the North Sea has produced about 50 billion barrels, with remaining recoverable reserves estimated at up to 15 billion barrels. While this scale ranks around tenth globally, the North Sea oil fields are jointly operated by Norway, the UK, Denmark, the Netherlands, and Germany.

(Images: Distribution of North Sea oil and gas resources; green indicates oil fields; sourced from the internet.)

The map of oil reserves in the Americas shows that Venezuela is the world’s most abundant, with proven reserves of about 3,030 billion barrels (around 413 billion tons), ranking first globally—more than Saudi Arabia by approximately 360 billion barrels.

Canada ranks fourth globally with about 1,630 billion barrels (222 billion tons), and the US is ninth with about 740 billion barrels (101 billion tons).

The Gulf of Mexico (marked within the red circle) is another major oil reserve area, with estimated reserves between 9 and 13 billion barrels.

(Images: Distribution of oil reserves in the Americas; sourced from Wikipedia; adapted by the author.)

Understanding the main global oil reserve regions, we turn to the Middle East. Saudi Arabia has the second-largest reserves after Venezuela, with about 2,670 billion barrels (around 364 billion tons).

Iran and Iraq have approximately 2,090 billion barrels and 1,450 billion barrels, respectively. Libya’s reserves are also notable, at about 484 billion barrels. The Persian Gulf region holds the world’s largest oil reserves, totaling an unprecedented 8,600 billion barrels (about 1,170 billion tons). Since the total proven global reserves are about 17,000 billion barrels, the Persian Gulf accounts for roughly 50% of the world’s reserves.

Distribution maps of oil reserves in Africa and the Persian Gulf region (sourced from Wikipedia; adapted by the author).

The map of oil and gas resources in the Persian Gulf shows that these resources are mainly concentrated west of the Strait of Hormuz. The core distribution area is within the black dashed box, with the Strait of Hormuz marked on the right.

The strategic position of the core oil and gas reserves relative to the Strait of Hormuz.

Many countries exporting via sea routes from the Persian Gulf must ship through key ports and terminals, including:

Ras Tanura, Ju’aymah (Saudi Arabia); Basra, Khor Al Amaya (Iraq); Zakhum, Jebel Dhana (UAE); Mina Al Ahmadi, Mina Abdullah (Kuwait); Kharg Island (Iran), etc.

For example, Ras Tanura is a major oil export terminal located in eastern Saudi Arabia. It features a large island with two main jetties (north and south). The south jetty is T-shaped with four berths; the north jetty is larger with six berths. Both accommodate large international oil tankers.

(Images: Core distribution of Persian Gulf oil and gas resources; satellite images of Ras Tanura terminal, showing oil storage tanks and pipelines, adapted from online sources.)

The terminal has numerous storage tanks, ranging from 60 to 100 meters in diameter and about 15 to 20 meters high, capable of holding hundreds of thousands to over a million barrels of oil each. These tanks store crude oil temporarily before being pumped onto ships.

Satellite images of Ras Tanura oil loading facilities show the layout of storage tanks and pipelines. After loading, oil tankers depart northeast or southeast, heading toward the central Persian Gulf, then along the eastern Saudi coast near Dammam and Jubail, passing through Bahrain, Qatar, and the UAE, finally entering the Strait of Hormuz.

Real-time ship position maps near Ras Tanura show vessels in transit.

Once through the Strait of Hormuz, ships enter the Gulf of Oman, then the northern Arabian Sea, passing around southern India into the Indian Ocean and towards Indonesia.

At Indonesia’s northwest, ships enter the Malacca Strait, then head northeast into the South China Sea, finally reaching Chinese ports.

Author’s note: These are personal observations for reference only.