Beijing
For more than a decade, leader Xi Jinping has overseen a transformation within the Chinese economy with one aim: making it energy-secure.
Under that vision, China has unleashed a renewable energy revolution of wind, solar and hydropower, drilled ever deeper into oilfields offshore and on, and forged pacts with partners for more supply – all in a bid to cut the country’s reliance on imported fuel and insulate it against “external shocks.”
Now, the historic oil crisis triggered by the United States and Israel’s war on Iran is posing the sternest test to date of China’s Promethean effort toward energy self-sufficiency. It’s a test that China appears to be passing.
While fuel-strapped countries across Asia have scrambled for supplies, China – the world’s largest energy importer – has been sitting on vast stockpiles of oil, an industrial sector largely run on domestic energy and a fleet of cars increasingly powered by electricity, not gas.
For China, the ability to weather the energy shocks from the weeks-long war “is sort of a vindication of everything they’ve done to enhance energy security,” said Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University.
“There’s a lot they can look back on and say, ‘We made the right call.’”
That vindication for China comes at a time when the US has retreated from its push into renewable energy and electric vehicles – creating a steep divergence between the models of the world’s two leading economies when it comes to power.
Since becoming a net importer of energy in the early 1990s, China has seen its reliance on the Middle East as a dangerous vulnerability.
Its leaders have eyed the narrow waterways like the Strait of Malacca through which this fuel flows as potential chokepoints if a future adversary wanted to strangle Beijing’s supply.
To reduce reliance on maritime routes, China has over recent decades built costly pipelines funnelling oil and gas over land from Central Asia, Russia and Myanmar. It’s also diversified its sources, with Russia catapulting to the top of China’s list of oil suppliers in the wake of Moscow’s invasion of Ukraine.
But while his predecessors focused on expanding China’s sources of oil and gas, Xi has also aimed to reduce China’s reliance on the outside world altogether.
China must “adhere to worst-case-scenario thinking,” Xi’s adage goes, often repeated as he steels his cadres to prioritize national security in the face of what he sees as an increasingly hostile and volatile world.
Under Xi, Beijing ramped up a nascent push to both increase green energy and reduce reliance on fossil fuels, unleashing more government backing for renewable energy and EVs.
Now, sprawling solar and wind farms are being installed at breakneck pace across China’s plateaued hinterlands and along its coastlines. Domestic factories have cracked the code on making cheap batteries for electric cars, which are fast replacing gas-guzzlers on China’s highways. It helps that China dominates supply chains for materials needed to make these goods.
And the picture is diverse. In a country already running a third of global hydropower capacity, ambitious dam projects are breaking ground in China’s mountainous west, while the government has set its sights on pioneering next-generation technologies like nuclear fusion and green hydrogen.
Meanwhile, rich coal deposits stretched across northern Chinese provinces continue to feed power plants and backstop renewable supply, in a reminder that China, the world’s largest carbon emitter, has yet to kick its fossil fuel habit.
And even as China is running much of its industry on electricity from renewables and coal, its state-owned energy giants have been probing deeper into the country’s deserts and beneath its seabeds in search of more oil and gas – while building up crude reserves estimated to last at least several months.
In all, the world’s second-largest economy imports what Chinese analysts suggest is only about 15% of its energy. But it still relies on imports for 70% of its oil and about 40% of its natural gas – and China hasn’t been untouched by the economic turmoil unleashed by war in the Gulf.
Surging jet fuel prices have spilled over into higher ticket fees and even flight cancellations, transport costs are up, and elevated global commodities prices are buoying prices at the factory gate.
Central planners have intervened to cushion gas and diesel price hikes. Beijing has now given state refiners the green light to tap commercial oil reserves, according to a Bloomberg News report on April 10, citing people familiar with the matter.
And critically, Beijing’s drive for self-reliance only goes so far for an economy whose vast manufacturing sector relies on healthy overseas demand as it faces weak consumption at home.
But as China has remained comparatively insulated amid the historic disruption of global oil markets – even clocking robust growth in the first quarter of 2026 – Xi and his planners appear even more assured in their strategy.
“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.
Today, China is far and away the leader in producing renewable energy – operating three times the wind and solar of the United States and India, the next two largest countries, combined, according to the Global Energy Monitor research firm.
The renewable share of China’s energy mix is expanding at a rapid clip, with the aim to one day eclipse coal, even as China continues to lean heavily on the polluting fossil fuel to electrify its economy. (Critics say Beijing should set more ambitious targets to cut coal and meet its international climate pledges.)
The rise of electric and hybrid vehicles – which account for more than half of new vehicles sold in China – has reduced oil demand by more than 1 million barrels per day, according to a 2025 study by the Rhodium Group. The International Energy Agency has predicted China’s oil consumption will peak in 2027.
“Before we worried about China’s energy security, but now we know our solution is workable,” said Lin Boqiang, dean of the China Institute for Energy Policy Studies at Xiamen University. “We have renewables, we have electric vehicles, and when oil prices get higher these vehicles become ever more competitive … but without 20 years of investment we wouldn’t have this now.”
Even still, Xi has not forsaken fossil fuels, still required for some industry and transport. In 2018, as trade tensions rose with the first administration of US President Donald Trump, he called for China’s energy giants to revamp their own oil and gas production.
China reached record-high oil production last year, as companies pumped more from aging oil fields, put new technology to use on sprawling offshore reserves in China’s Bohai Sea, and continued to drill boreholes miles deep into oilfields in far western Xinjiang in search of more supplies.
Critical to the energy security picture too, the government and its oil firms have kept their reserves flush, ramping up exports prior to the conflict to amass what trade data firm Kpler estimates to be some 1.3 billion barrels, or enough to cover three months, as of March.
“The decision to emphasize the energy security and boost the stock reserve … is well paid back,” said Muyu Xu, a Kpler senior crude oil analyst, referring to how China is weathering the current oil shock. “When it comes to products like gasoline and diesel, the supply should be assured, because that’s the bottom line for China.”
Despite Beijing’s “worst-case-scenario” planning, when Iran blocked traffic across the Strait of Hormuz in early March, China’s exposure was large.
Some 38% of oil and 23% of liquified natural gas typically passing through the strait are bound for Chinese ports, according to financial firm Nomura. Overall, that accounts for about half of China’s supply of imported oil and a sixth of its natural gas.
But that dependence makes China’s resilience starker – and spotlights the contrast between Beijing’s plan to electrify its economy and the model in the US, which some critics have dubbed a “petrostate” due to its reliance on fossil fuels.
Beijing is sure to see an opportunity for this contrast to play into Xi’s broader message that today’s world is “rife with chaos” but China (read: unlike the US) is a responsible and visionary leader for this age.
Already there are signs that the world is paying attention.
In the first quarter of this year, China’s exports of green technologies surged, with electric vehicles, lithium batteries, wind turbine goods up 78%, 50%, and 45% year on year, according to official data.
The crisis could also open up more opportunity for that sector, which faces restrictions on certain green tech exports to countries including the US, Canada, and those in the European Union.
The closure of the Strait of Hormuz “will force every country to rethink their energy security, and move toward producing more energy domestically,” said Xiamen University’s Lin.
And when it comes to whether they want to use the batteries and wind and solar technologies that China is already producing at scale to do so, countries that previously were reluctant “may also need to think twice.”
