China depends on Iranian oil Due to its low price compared to the rest of the world prices, because the sanctions left only a few buyers for Iranian oil. Although India and some developing countries continue to buy Russian oil, which is more expensive than Iranian oil, Beijing is the only country in the world that is willing to buy oil from Tehran.
As for Iran, oil sales to China, which amount to $2 billion per month, represent no less than 5 percent of Iran’s entire economic output, so it is… Exports to Chinaa vital source of revenue, which in turn provides the money Iran needs to pay for its foreign imports. Knowing that Iran exports approximately half of its oil production and uses the rest to meet its domestic needs. As for the remaining small portion, it provides as economic aid to Syria And Venezuela.
Knowing that Iran is a member of OPEC, its production is about 3.2 million barrels per day, equivalent to 3 percent of global production.
Iran’s oil exports rose this year to their highest levels in several years to 1.7 million barrels per day, despite US sanctions, and Chinese refineries buy most of these supplies, as Beijing says it does not recognize unilateral sanctions.
Impact on international markets
Oil prices rose sharply in Global marketsLast week, after US President Joe Biden’s statements, there is discussion about the possibility of Israel striking Iran’s huge oil sector, even though most countries avoid Iranian oil due to international sanctions imposed on Tehran.
But for China, the world’s largest oil importer, which imports nearly three-quarters of its oil consumption, the potential loss of Iranian supplies would see it turn to global markets to meet its energy needs, which would increase market demand and put pressure on prices.
However, some analysts believe that an attack on Iranian oil infrastructure is unlikely, and noted that oil prices could face significant downward pressure if Israel focuses on any other target.
Analysts at ANZ Bank indicated on Friday that even if the attack targeted Iranian oil facilities, there are seven million barrels per day of spare supply capacity within the Organization of the Petroleum Exporting Countries (OPEC) to compensate for the loss of its oil production, according to Reuters. .
Accordingly, if China is unable to purchase the usual amount from Iran, about 1 to 1.5 million barrels per day, it may find the rest of OPEC members ready to supply it instead. Therefore, the damage that may be caused to the Chinese economy as a result of an oil outage from Iran in the long term will be minimal.
In addition, China has been expanding its oil reserves over the past several years, currently estimated at the equivalent of more than three months of the country’s entire oil imports and two years of China’s imports from Iran, which would provide a temporary solution in the event of an interruption in Iran’s supplies.
However, China has done a lot to reduce its overall dependence on oil. While oil accounts for 40 percent of the energy used in the United States, it represents only about 20 percent of China’s total energy supply, as more than half of the cars sold in China currently are battery-electric or gasoline-powered hybrids. And electricity.
China also generates the energy needed to power these cars primarily by burning coal — China is the world’s dominant coal producer and consumer — and using solar panels and windmills. A large portion of China’s oil imports is used in the country’s chemicals industry, which is the largest in the world, or for refining diesel that powers trucks, according to Bloomberg.
But according to experts, the big question for China is not whether Israel might strike Iran’s oil infrastructure, but rather how Iran will respond.
It is noteworthy that about a quarter of the world’s oil passes on ships through the coast of Iran from the Strait of Hormuz, which connects the Arabian Gulf to the Arabian Sea. Therefore, the Iranian response is considered the source of greatest concern from a global perspective and for China in particular.
