China & Iran: Xi’s Strategy for Oil & Influence

On Tuesday, Iran entrusted a message to one of its men placed in a special position: Beijing. Abdolreza Rahmani Fazli, Tehran’s ambassador to China, explained his country’s position in public. «As guarantors of the security of the Strait of Hormuz, we attach great importance to the safe passage of ships of all countries – said the diplomat, with an obvious strain -. But if the overall safety of the passage and the surrounding area cannot be guaranteed, then we will not be able to guarantee the safety of transit from Hormuz.”

Ambassador Fazli’s words will perhaps remain as the most blatant euphemism of the third Gulf War. A few hours later, Iranian forces opened fire on three large cargo and container ships with the flag of Thailand and other countries unrelated to the conflict. The US Navy had to foil the activity of sixteen enemy minelaying ships. Yet the exit of Tehran’s ambassador to China was weighed word for word: «Traffic will be regulated – said Abdolreza Rahmani Fazli -. But this does not mean closing the strait.” Naturally this is false, because Iran has effectively taken hostage the flows of crude oil, fertilisers, aluminum and helium from the Gulf on which the price balances of the international economy are partly based. However, the implicit message and the place from which it was spread matter: the Tehran regime tries to dictate the conditions and suggests that it could allow a “regulated” reopening of the strait if the Israeli-American attacks stopped. Saying it from Beijing means trying to reassure the “friendly” superpower and invoke it in some way as arbiter of the post-war arrangements of Hormuz and the Gulf. This is the move of a regime perhaps on the ropes, but confident that even Donald Trump is close to his pain threshold: there is a limit beyond which the White House cannot resist the destabilization of markets and prices in America, and keeping Hormuz closed serves precisely to bring that limit closer.

However, the Chinese also needed reassurances from Tehran, because last year 52% of the oil they imported came from the Persian Gulf. The government and analysts in Beijing continue to downplay the effects of the war on their country, but in these twelve days they have lost over half of their usual supplies. China’s first supplier today is Russia, the second was Saudi Arabia and the third Iran (even if its crude oil, under sanctions, is officially extracted in Malaysia at customs). The Beijing government must have seen the conflict coming, because in the first two months of 2026 it increased oil purchases by 15.8% compared to a year ago. Today the strategic reserves of the People’s Republic are greater than the overall reserves of the other thirty-two most advanced countries in the world: Europe and the United States included.

But the Chinese elites have serious reasons for concern in this war. If it ends with the rise of an Iranian government answerable to Washington, then America would gain indirect control over Hormuz: for the White House it would be like having its hand on the jugular of the People’s Republic’s supplies, a dangerous vulnerability for the Beijing government if it were to attempt military annexation of Taiwan in the future. This is also why Xi Jinping is doing everything he can – without exposing himself – to preserve the power of the ayatollahs. He did send it a spy ship that helps Tehran with reconnaissanceprovides satellite navigation (BeiDou-3) for Iranian drone shooting and radar systems capable of tracking American covert flights.

Xi often repeats that “the East is rising and the West is declining.” Government policy advisors like Zheng Yongnian these days confess that they are not so sure, judging by current US military capabilities. This war may decide whether Xi was right, but he has no doubts about one point: he wants to keep the March 31 summit with Trump in Beijing. The less he trusts the tycoon, the more interested he is in listening to him in person.