On May 3, 2026, China blocked US sanctions against five refiners accused of importing Iranian oil. This decision reflects China’s strategic positioning in global energy security amidst rising tensions in the Middle East.
China’s Ministry of Commerce issued a prohibition order against the US sanctions, which bar the refiners from the US financial system. These refiners include Hengli Petrochemical, Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical. China sources more than half of its oil from the Middle East, with a significant portion coming from Iran.
In 2025, China purchased over 80 percent of oil that Iran shipped. The country’s teapot refineries account for a quarter of its total refining capacity. This capacity is crucial for maintaining energy independence and securing stable oil imports.
Key facts:
- China’s strategic oil stockpiles were approximately 1.4 billion barrels at the start of the war in 2026.
- About 30 percent of China’s end-use energy is electric.
- The conflict has led to a 70 percent increase in crude oil prices since it began.
China has invested heavily in clean energy technologies and expanded its overland oil and natural gas pipelines from Russia and Central Asia. Chinese electric vehicles (EVs) accounted for over half of new car sales in China in 2025. The closure of key shipping routes presents an opportunity for these EVs to gain market share.
The Ministry of Commerce stated, “The sanctions improperly restrict business between Chinese enterprises and third countries in violation of international law and the basic norms governing international relations.” Analysts suggest that this may boost China’s exports of clean energy technology products to the Middle East.
China Southern Airlines and Xiamen Airlines recently ordered 137 Airbus A320neo jets, expanding Airbus’s presence in China. The stock price of Airbus has increased by 5 percent over the past week as a result.
This proactive approach illustrates China’s commitment to maintaining its energy security amidst ongoing geopolitical challenges.
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