China's Energy Cushion

China is taking a smaller hit from the Middle East war than many big oil importers because it spent years building renewables, rail, electric vehicles and oil buffers. (france24.com) China still depends heavily on foreign crude: more than half of its seaborne oil came from the Middle East in 2025, according to Kpler data cited by Agence France-Presse. Beijing is also a net oil importer, so any disruption in the Strait of Hormuz still reaches Chinese refiners and transport firms. (freemalaysiatoday.com) President Xi Jinping signaled on April 6 that Beijing wants to speed up a “new energy system” as the war continues, with state media saying he called for faster planning, more hydropower and orderly nuclear expansion. Reuters reported the remarks after weeks of oil-market disruption tied to the Iran conflict. (cnbc.com) The cushion starts with the power grid. China added more than 430 gigawatts of new wind and solar capacity in 2025, and total installed renewable capacity rose above 1,800 gigawatts, according to the National Energy Administration. (english.news.cn) It also runs through transport. The International Energy Agency said electric car sales in China rose almost 40% in 2024, and Our World in Data put electric vehicles at almost half of new car sales there that year, cutting future gasoline demand growth. (iea.org) (ourworldindata.org) Rail reduces oil use too. China’s high-speed rail network passed 50,000 kilometers in December 2025, according to state media and the National Railway Administration, giving travelers an alternative to short-haul flights and highway trips. (english.news.cn) (english.www.gov.cn) Beijing also spent 2025 buying and storing crude while prices were lower. Columbia University’s Center on Global Energy Policy estimated China had 1.206 billion barrels of oil in onshore storage in early January 2026, enough to cover 104 days of net crude imports at 2025 rates. (energypolicy.columbia.edu) That does not mean the shock is painless. Reuters reported on April 7 that China again limited domestic gasoline and diesel price increases to about half the rise implied by its pricing formula, showing Beijing is still trying to contain the war’s inflationary spillover. (marketwatch.com) Some sectors are more exposed than others. Reuters reported in late March that China’s three biggest state-owned airlines warned that surging jet fuel costs from the Iran war were clouding their outlook for 2026. (msn.com) China’s energy mix still includes coal as a backup, and Xi’s April 6 remarks said the country would keep balancing energy security with low-carbon development. The result is not independence from Middle East oil, but a broader system that gives Beijing more room to absorb a supply shock. (usnews.com)