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HomeBusinessChina's Economic Interests in the Middle East: A Growing Reliance on Oil

China’s Economic Interests in the Middle East: A Growing Reliance on Oil

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China has positioned itself as a neutral player in the Middle East, mediating a deal between Iran and Saudi Arabia and emphasizing its friendship with both Israel and Palestine following the recent conflict with Hamas. However, China’s interests in the region are significant, particularly due to its dependence on oil.

China is the largest buyer of oil from Saudi Arabia, and a significant portion of its oil imports come from the Persian Gulf. Additionally, China has been increasing its purchases of Iranian oil, despite international sanctions on Iran. This reliance on oil imports leaves China vulnerable to the instability in the Middle East.

China, as the world’s second largest economy, has rapidly become reliant on foreign oil. While it has made investments in electric vehicles, gasoline consumption remains high due to the gradual shift in the country’s vehicle fleet. Furthermore, China’s position as the world leader in petrochemical production further contributes to its oil thirst.

China’s dependence on oil imports is unlikely to decrease significantly in the future, according to energy experts. The country has been discreetly buying oil from Iran, even though it officially denies such transactions. Chinese refineries prefer Iranian oil due to its lower price compared to Russian oil.

Russia, despite its proximity to China, faces infrastructure limitations in increasing its oil shipments southward. Discussions have been held regarding a potential natural gas pipeline that could also accommodate oil shipments, but the commercial viability of such a project is uncertain.

China has been rapidly building storage tanks to store its oil purchases, potentially indicating substantial oil reserves. While official figures are not released, experts estimate that China’s oil reserves are equivalent to about 90 days of imports.

However, energy security is not the sole factor guiding China’s decisions in the Middle East. The country aims to maintain friendly relations with the Islamic world while also dealing with internal issues concerning Muslim minorities. China has tried to avoid deep involvement in the region’s conflicts to achieve this delicate balancing act.

Nevertheless, China’s role in the Middle East is growing, and it may need to play a more active role in stabilizing the region in the future.

Li You contributed research.

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