Hans van Leeuwen
Sun, March 1, 2026 at 11:00 PM MST
President Xi Jinping is looking to Trump-proof China’s energy supplies - Sarah Meyssonnier / POOL / AFP via Getty Images
Plenty of world leaders would have been pleased to see the back of Ali Khamenei, Iran’s supreme leader. But China’s foreign minister Wang Yi wasn’t among them.
According to an official readout of his call with Russian foreign minister Sergei Lavrov on Sunday, Wang criticised the “blatant killing of a sovereign leader”. He also branded the US-Israeli strikes on Iran as “brazen” and “unacceptable”.
His anger came as no surprise. As with Venezuela in January, Donald Trump’s decapitation strategy has targeted one of China’s most critical suppliers of oil.
China imports up to three-quarters of the oil it needs. Of this, last year about a third was ultimately bought from Iran or Venezuela, albeit often rerouted through pliable partners such as Malaysia.
The US president’s military adventurism is exposing China’s vulnerability and dependency, as the world’s second-largest consumer of oil and the largest importer.
While the US shale revolution of the 2010s has allowed America to turn itself an energy fortress, China remains at the mercy of the global market.
“China is significantly reliant on foreign fossil fuels, leaving it exposed to disruptions stemming from instability and geopolitical competition,” the Centre for Strategic and International Studies (CSIS) says in a recent report.
0203 Net share of primary energy coming from imports, by country
Xi Jinping, the Chinese president, knows it. And he doesn’t like it.
Between 2013 and 2024, CSIS calculates, Xi mentioned “energy security” in at least 180 speeches and official engagements. You can bet most were about China’s need to improve it.
As the Chinese Communist Party apparatus this week puts the finishing touches on the country’s next five-year plans, architects must reckon with the fact that Trump has fatally undermined two crucial sources of oil: Venezuela and Iran.
Officials will be looking to Trump-proof China’s energy supplies. They want to eradicate dependency on unstable regimes, fair-weather friends, and tenuous chokepoints such as the Strait of Hormuz in the Middle East and the Strait of Malacca closer to home.
China began buying Iran’s oil in earnest in the early 2000s, as its industrial revolution gathered steam. But Iranian crude became much more attractive after the country came under sanctions in 2012. The Chinese, taking advantage of the sellers’ desperation, could bargain down the price.
A system developed in which the Chinese used “dark fleet tankers” that skirted the sanctions. Arriving in China, it was marked as having come from Malaysia or the Middle East.
The customers were not big state-owned refiners but small “teapot” operations. They paid the suppliers renminbi, using smaller banks. The Iranians would presumably either park the proceeds in a Chinese bank and/or spend it on Chinese goods.
The trade burgeoned, giving the Chinese access to a cheap, plentiful supply of oil that nobody else could or would buy.
It was a similar situation with Venezuela, where the oil industry has been under varying degrees of sanctions since 2019.
Now, China faces a painful reversal of this dynamic: instead of access to a cheap and plentiful supply of oil, the country faces a shortfall that must be made up on the open market at a time when prices are surging.
It is not hard to see why Xi is therefore seeking to forge a path to energy independence. And he is pulling every lever at his disposal.
This includes ramping up domestic oil and gas, more coal and a step-up in nuclear. But his biggest bet is on renewable energy such as wind and solar.
China’s green transformation
The new draft 2026-2030 five-year plan under debate this week sets out a grandiose ambition: “The comprehensive green transformation of economic and social development, to build a beautiful China”.
This may look from the outside like an altruistic or high-minded crusade to cut carbon emissions and curb climate change. But in reality, it is part of an economy-wide push to turn China into an energy autarky.
The China National Petroleum Corp Economics and Technology Research Institute last month forecast that the country’s “energy self-sufficiency rate” would reach just shy of 85pc this year.
“China’s energy security capacity is steadily consolidating,” declared Wu Mouyuan, the institute’s vice-president.
Under the new five-year plan, renewable energy supply should “continuously increase”, gradually replacing fossil-fuel sources. Coal and oil consumption should both “peak” within the next five years, allowing China to wean itself off the global market.
“The 15th Five-Year Plan period is the final stage for achieving carbon peaking,” said a recent article on the website of Xinhua, the state news agency.
0203 Coal and solar energy are crucial to deliver energy independence
But the agency warned this would need to be a “smooth” process. Elaborating on this theme, the People’s Daily, a Communist Party mouthpiece, said oil would continue to play a “vital role” even after its peak.
Chinese demand is still increasing by 1pc to 2pc a year, as the authorities continue padding out their strategic stockpile to protect against disruption like that seen in Iran this weekend.
Beijing bought as much as a million barrels a day last year, with its strategic petroleum reserve now equivalent to at least 96 days’ worth of crude oil imports. The physical storage facilities still have room to house about the same amount again.
Meanwhile, Xi has been trying to ensure that China cuts reliance on oil and gas imports by fully exploiting home-grown reserves.
In the 2010s, domestic oil production began sliding from a peak of 4.3 million barrels a day. In 2018, Xi issued an impassioned edict to “vigorously increase exploration and development”. This added another half a million barrels a day, restoring the lost output.
China’s gas fields are not as promising as the great Permian Basin in America’s south-west. But last year domestic gas output rose 6pc to a record 262 billion cubic metres. That brings China on a par with Iran, the world’s third-biggest producer after the US and Russia.
On coal, Xi might lack Trump’s recent zeal. But China has ample domestic coal reserves, and it needs the fuel to deliver a copious and constant power supply to the country’s large industrial base and to its fast-growing network of data centres.
China produces more coal than anywhere else, and since 2011 has consumed more than the rest of the world combined.
Coal still supplied 56pc of China’s primary energy in 2024, compared with just 8pc in the US. And the Chinese are still building more coal-fired power stations.
At the same time, last year China put on another 430 gigawatts of solar and wind capacity, a 22pc increase on the previous year. This was almost twice as much as the US has installed in its entire history.
China’s biggest bet is on renewable energy such as wind and solar - Chu Baouri/Getty Images
Solar and wind capacity is now 1,840 gigawatts, accounting for almost half of total power capacity and generating 22pc of China’s electricity output.
Coal accounts for 1,500 gigawatts, and nuclear power plants offer 55 gigawatts. China’s nuclear industry sits behind only those of the US and France, and there is another 30 gigawatts under construction.
The breakneck pace of China’s race to green energy meant that by the end of last year, China’s carbon emissions may have started to shrink.
But this is not Beijing’s primary concern. Its only climate promises are to reach a peak of carbon emissions by 2030, with net zero shunted into the long grass of 2060.
Xi’s focus is less on saving the planet, and more on protecting China from that planet’s unreliable and combustible geopolitics.
Trump’s action in Iran could well prompt Xi to put his foot to the floor.
As the US closes down his access to black gold, he will have to turn a deeper shade of green.
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