As the United States and Israel open a new chapter of chaos in the Middle East, China will benefit from a Washington establishment that does not have the political or physical resources to focus on Asia.
Officially, China has condemned the attacks. Wang Yi, the foreign minister, called them “unacceptable” and called for a ceasefire, typical rhetoric from Beijing in response to Donald Trump’s increasingly erratic foreign policy actions.
Wang made similar comments after the US capture of Venezuelan President Nicolás Maduro in January. The Chinese government wastes no opportunity to present itself as the defender of international law and stability, even as it provides little material support to the smaller partners in the crosshairs of the American president’s latest furies.
But aside from the potential to score diplomatic points, Trump’s decision to embark on a war against Iran that is already escalating into a regional conflict creates space for China to once again take advantage of its critical mining dominance, particularly in the area of defense, and places the Taiwan issue on an increasingly long list of concerns for the United States.
However, attacks on Iran pose some risk to China, especially when it comes to oil.
China is believed to buy about 80% of the oil shipped by Iran. That represents about 13% of China’s seaborne imports, although it is difficult to understand the true scale of China’s Iranian oil imports because much of it is labeled as originating in Indonesia or Malaysia to avoid US sanctions.
Losing cheap oil from Iran would be a blow to China, albeit a manageable one. But it has only been two months since the United States effectively took control of Venezuela’s oil industry, another, albeit much smaller, source of cheap supply for China.
According to an analysis by Erica Downs, a senior fellow at the Center for Global Energy Policy at Columbia University, more than a fifth of China’s oil imports in 2025 came from sources, including Venezuela, Iran and Russia, that had been placed under sanctions. Two of those supply chains are now in jeopardy. And on Saturday, Kirill Dmitriev, head of Russia’s sovereign wealth fund, tweeted that prices could soon reach “over $100 per barrel of oil.” Benchmark Brent crude prices hit $82 a barrel on Monday, a 14-month high.
“This is not coming at a good time for China,” says Alicia García-Herrero, chief Asia Pacific economist at investment bank Natixis, noting that China was facing rising energy demands due to the rapid deployment of data centers needed to train artificial intelligence, a key pillar of China’s economic plans for the next five years. “The trend is less and less oil at below-market prices.”
On Sunday, the Hualue American Studies Center, a Shanghai-based think tank with government ties, noted that a 2021 China-Iran strategic partnership deal, valued at $400 billion, could also be at risk if leadership in Tehran were replaced by a pro-Western regime.
But China has been strengthening its strategic buffers. In reality, only a small fraction of the $400 billion promised for 2021 has been delivered. And perhaps mindful of the geopolitical shocks looming on the horizon, China spent the past year building up oil reserves, demand for which will likely peak soon as China’s green transition accelerates. China’s crude oil imports rose 4.4% last year, and more than 80% of that increase was stored, according to calculations based on data from Rystad Energy.
That means it will be able to weather any hit to its supply – both from the loss of Iranian oil and disruptions in the Strait of Hormuz – for at least a few months.
Some analysts say the biggest damage from an oil price shock will be to Trump, who wants to keep inflation at bay in the United States in the run-up to the November midterm elections.
A critical moment
And there may be some ways China could benefit from the unrest unleashed by Washington’s military broadsides.
Launching a new offensive in Iran will deplete American weapons reserves for both the United States and Israel. Last year, the Pentagon halted weapons shipments to Ukraine over concerns about its dwindling stockpiles. The Guardian reported that the Pentagon has only 25% of the Patriot missile systems needed for its military plans.
And yet, the United States has deployed much of its most powerful weaponry for Operation Epic Fury in the Middle East, including the Patriot and Thaad missile defense systems, as well as F-35 fighter jets and other advanced equipment.
All of these weapons rely on semiconductors and radars made from gallium, a critical mineral whose supply chain China controls. During last year’s US-China trade war, Beijing cut off the export of gallium and other rare earths, nearly paralyzing global industrial supply chains and forcing Washington to intervene in trade negotiations.
Some analysts believe Trump’s decision to open a new military front at a time when the United States is still dependent on China for a crucial defense industry product will strengthen China’s position for the upcoming Trump-Xi meeting in Beijing.
Joseph Webster, a fellow at the Atlantic Council think tank, says: “Beijing will be happy to see the United States spending its scarce munitions and interceptors on a secondary scenario. Reducing existing weapons stockpiles will not only reduce the resources available for a Taiwan contingency, but China’s dominance of critical minerals could give it leverage over the production of new weapons.”
Matthew P Funaiole, senior researcher at the Center for Strategic and International Studies, notes that gallium is primarily used in sensors rather than in the expendable components of most munitions. “The most sustained vulnerability is not in turning them on, but in the ability to manufacture, upgrade and repair the broader ecosystem of gallium-based systems.”
U.S. attempts to build supply chains for critical minerals like gallium outside of China are still in their early stages and “are unlikely to significantly change supply dynamics in the immediate term,” Funaiole says.
However, there are risks for China on the horizon. Some analysts believe the removal of a second leader of a Chinese strategic partner in as many months will hurt China’s appeal to countries in the global south. In the past three years, Iran joined the Shanghai Cooperation Organization and the BRICS, two multilateral organizations led by China. China also negotiated a detente between Iran and Saudi Arabia, which seems somewhat insignificant now that there are questions about the extent to which Saudi Arabia may have supported the US attacks.
Still, an American foreign policy establishment worried about another sprawling and unpredictable conflict, far from China’s neighborhood, will likely bring more gains than losses for Beijing.
