Iran is actively pursuing economic support from China in the hope that China’s increasing tensions with the United States, combined with its urgent need for hydrocarbons, will pave the way for an even more robust partnership with Iran. An intensified collaboration could further reduce the sanctions burden and foster mutual growth.
In light of its economic isolation brought about by severe international sanctions, Iran is increasingly dependent on its relationship with China. Iran became a member of the Shanghai Cooperation Organization, a coalition backed by China and Russia, last year, further cementing ties. It also recently joined the BRICS international group, further highlighting Beijing’s influential role in Iranian diplomacy.
China, meanwhile, is Iran’s largest trade partner and a key market for its oil exports. It buys more than 90% of Iran’s oil exports. Both nations solidified their economic alliance in 2021 by signing the Strategic Partnership Plan that projected $400 billion in Chinese investments in Iran over the next 25 years. This partnership is a crucial lifeline for Iran amidst its stringent international sanctions. In return, China benefits from significantly discounted Iranian oil, as exports were projected to rise from 818,000 barrels a day in 2021 to an anticipated one million per day by 2023.
As tensions heighten in the Middle East, China is taking strategic diplomatic steps to uphold its enduring connection with Iran. As the world’s premier oil importer, China’s reliance on Saudi Arabia and Iran for energy fuels its vested interest in maintaining regional stability. While the Beijing-Tehran relationship appears robust, it may have its limitations, however. China’s stance amidst the current turmoil reflects its overarching diplomatic strategy—protecting its strategic interests while fostering regional stability. Yet any significant disruption to this stability could directly threaten China’s energy security, given its reliance on Middle Eastern oil. Should a direct conflict erupt between Iran and Israel, Beijing’s oil supply from Tehran could be jeopardized. If China ever faces a significant disruption in oil imports, it is highly doubtful that it will remain passive. Callous measures may well be taken, including military action, given its strong reliance on Iranian oil.
That said, China has strategically navigated its economic connections with Iran and other Gulf states to establish itself as a regional power broker and mitigate this risk. Notably, Beijing’s facilitation of a détente between Iran and Saudi Arabia in 2023 caught Washington off-guard, showcasing its growing regional influence.
Moreover, China increased support for Palestinian leadership following the Hamas attacks in Israel on Oct. 7, 2023, also facilitating agreements with the terrorist group Hamas. These negotiations have yet to yield any concrete outcomes, however. While ambitious, this Chinese initiative in the conflict has underscored the limitations of its influence, as is evident in the Saudi-Iran deal. Amid escalating tensions and the potential for conflict growing between Israel and Iran, it seems unlikely that China could exert significant pressure on Iran to reduce hostilities.
China’s robust investments in Israel, particularly through the Belt and Road Initiative, illustrate its expansive ambitions with the nation. China alone pursued more BRI-related projects in Israel than any other Middle Eastern nation. Its eagerness to acquire Israeli technology companies, as demonstrated by a $300 million bid for ColorChip, has been tempered by pressure from the United States leading Israel to impose stricter regulations on such transactions.
As Iran navigates a landscape of severe international sanctions, its reliance on China as its largest trading partner deepens—strengthening political ties born from mutual distrust of the United States.
To effectively counter China’s growing influence, the West must enhance multilateral cooperation, invest in infrastructure development throughout the Middle East, and offer viable alternatives to Chinese initiatives. Moreover, China has been accused of supplying weapons to groups such as Hamas, Hezbollah, the Houthis and Iran. The United States must ensure that its partners in the Middle East recognize the security implications of these terrorist partnerships with China.