China Maintains Energy Stability Amid Global Oil Disruption from Gulf Conflict

China has built up significant oil stockpiles and diversified its energy sources over the past decade, aiming to enhance energy security. Under the leadership of Xi Jinping, the country has expanded renewable energy production and promoted electric vehicles to reduce dependence on imported fossil fuels.

This strategy is now being tested by the oil crisis resulting from the conflict in the Gulf. While other Asian countries have faced fuel shortages, China has relied on its reserves and domestic energy production to maintain supplies. Cnn reported that China imports about 15% of its total energy, but relies on imports for 70% of its oil and 40% of its natural gas.

Despite this, the country has experienced limited disruptions, with interventions to manage price increases for gas and diesel.

Diversification Efforts China has constructed pipelines from Central Asia, Russia, and Myanmar to reduce reliance on maritime routes such as the Strait of Malacca. Russia has become China's top oil supplier following Moscow's invasion of Ukraine. Additionally, China has increased domestic oil and gas production, reaching record highs in 2025 through extraction in regions like the Bohai Sea and Xinjiang.

The government has also built up crude oil reserves estimated at 1.3 billion barrels, sufficient for about three months, according to trade data firm Kpler. In response to the crisis, state refiners received approval to tap commercial reserves, as reported by Bloomberg News on April 10, citing people familiar with the matter.

These measures have supported robust economic growth in the first quarter of 2026.

Electric Vehicles China operates three times the wind and solar capacity of the United States and India combined, according to the Global Energy Monitor. Renewables are expanding rapidly, with goals to eventually surpass coal in the energy mix, though coal remains a major source.

The country holds a third of global hydropower capacity and is pursuing technologies like nuclear fusion and green hydrogen. Electric and hybrid vehicles accounted for more than half of new vehicle sales in China, reducing oil demand by over 1 million barrels per day, based on a 2025 Rhodium Group study.

The International Energy Agency predicts China's oil consumption will peak in 2027. China dominates supply chains for materials used in batteries and renewable technologies.

The conflict began with Iran blocking the Strait of Hormuz in early March, affecting routes for 38% of China's imported oil and 23% of its liquefied natural gas, according to financial firm Nomura. This has led to higher jet fuel prices, increased transport costs, and elevated commodity prices in China. However, the country's energy strategies have limited broader economic fallout.

“We were early in developing wind and (solar) power, and that path now proves to have been forward-looking," Xi said late last month, according to a report from Chinese state broadcaster CCTV. Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University, stated that China's ability to weather the energy shocks is a validation of its energy security efforts. Lin Boqiang, dean of the China Institute for Energy Policy Studies at Xiamen University, said that renewables and electric vehicles provide a workable solution for energy security, especially as oil prices rise. Muyu Xu, a senior crude oil analyst at Kpler, noted that emphasizing energy security and boosting reserves has paid off during the current oil shock. In 2018, amid trade tensions with the first administration of U.S. President Donald Trump, Xi called for increased domestic oil and gas production. China continues to use coal for power generation and as a backup for renewables, while remaining the world's largest carbon emitter. The contrast in energy approaches between China and the United States highlights differing priorities in fossil fuels and renewables.”