© EPA/ALEX PLAVEVSKI The Strait of Hormuz situation influenced the state the least.
The energy jolt triggered by the conflict in the Middle East took China by surprise, though Beijing had planned for such a calamity for many years. It has been increasing its oil reserves consistently and is aggressively promoting sustainable energy to the extent that national needs for processed oil, diesel fuel, and gasoline are diminishing. It is also employing technology to lessen its reliance on imported raw materials that fuel a significant number of its industries, The New York Times indicates.
China’s governing party has long considered its industrial base as the keystone of its national security blueprint. It has broadened this strategy since President Trump’s initial period in office. Concurrently, China has intensified its domestic industrial growth policies, which, consequently, has reinforced its worldwide supremacy over resources and supply networks.
While China stood as the globe’s largest consumer base for vehicles with internal combustion engines a decade earlier, it now holds the title of the foremost market for electric automobiles. China once was the top purchaser of foreign petrochemicals. It now largely utilizes local coal to manufacture specific chemicals like methanol and synthetic ammonia. Governmental arrangements and financing have been essential for this advancement.
With the Strait of Hormuz, through which nearly all oil for Asia transits, remaining largely inaccessible, China has thus far exhibited more resilience to the situation compared to the majority of countries.
Vietnam and the Philippines, encountering severe deficits of oil and other power sources, even sought aid from China last month, and Beijing voiced its readiness to assist.
Beijing has been consistently focused on managing its reliance on outside sources for energy and materials. At the beginning of the century, Chinese functionaries were concerned about another constricted waterway through which oil reached China: the Strait of Malacca, which divides Indonesia and Malaysia from Singapore. In 2004, China established an emergency oil reserve to address these worries. It has been quickly replenishing its stocks in recent months.
China still ranks as the world’s leading consumer of oil and gas, with three-quarters of its oil demands imported. Although Beijing does not publicize the dimensions of its reserves, unrefined oil imports are predicted to grow by 4.4 percent in 2025 compared to the year prior, while consumption witnessed a rise of 3.6 percent. But after billions of dollars in immediate grants to electric car manufacturers and hundreds of billions in investments in green energy, China’s endeavors have yielded success.
Meanwhile, China's oil usage is expanding within the petrochemical sector as the nation further secures its supply chains. The government has dedicated years to making substantial investments, offering affordable lending options, and promoting universities to specialize in chemical engineering.
“Everything Trump undertakes further reinforces Beijing’s autonomy,” said Wutke, a partner at the DGA-Albright Stonebridge Group advisory firm.
During his initial term, Donald Trump challenged China on monetary and commercial matters, instigating a trade conflict and technological rivalry.
In 2019, then-Premier Li Keqiang urged China to employ coal for power generation and chemical production as part of initiatives to curtail its dependence on offshore oil. This represented a divergence from China’s strategy to entirely phase out coal.
By the close of 2020, China had unveiled an official strategy detailing how to navigate the period of instability. Manufacturers were prompted to create technologies faster than international rivals to attain self-reliance and shield China from supply network disturbances.
“Trump 1.0 was a remarkably distinct break that reshaped China’s geopolitical estimations and reignited long-standing apprehensions. All of this has merely permitted the petrochemical upswing to accumulate pace,” remarked Laurie Milliwirth, co-founder of the Center for Energy and Clean Air Research.
Indications from authority figures enabled the industry to broaden and construct factories to utilize coal instead of oil to create petrochemicals.
Since 2020, China has been augmenting its coal consumption for chemical output, exceeding the total coal consumption of the United States, which amounted to 230 million tons, in 2025.
Chinese representatives have conveyed that utilizing coal is a temporary measure to enhance their reliance on renewable power, and they have also invested in technologies that use electricity to produce petrochemicals. However, employing coal as a substitute for oil is currently proving beneficial as oil and gas deficits have sent prices ascending.
As an illustration, China currently generates a third of the planet’s nitrogen fertilizer supply, and 80 percent of that supply is derived from coal, not oil. Since the commencement of the Middle East war, global prices for urea, the primary chemical in fertilizer, have surged by more than 40 percent, while the comparable quantity manufactured domestically in China remains at less than half the global benchmark.
Even before the American and Israeli armed forces initiated a war with Iran, China held a commanding position in the international market.
A hit to the water or the “cloud” may be more painful than an energy jolt. How the conflict in the Middle East is reconfiguring the principles of the global economy and who will incur a substantial cost and who will gain, delve into the detailed assessment by the expert team from the Center for Strategy XXI “Trump opened Pandora’s box: how we will pay for the war in the Gulf.”