Kyiv Security Forum Analytics

The war in Iran has posed a serious challenge for many countries around the world: loss of investment, rising energy prices, economic problems and security risks.

China is no exception. As part of the ‘Comprehensive Strategic Partnership’ between China and Iran, a 25-year, $400 billion agreement was signed in 2021 to invest in Iran’s energy, infrastructure and banking sectors, partly in exchange for discounts on oil exports to China. And this channel has been utilised very extensively by both sides. In 2025, Tehran exported over 80 per cent of its oil to China.

China also receives a significant portion of its energy resources from other Middle Eastern countries, whose export potential is now in doubt, at least in the immediate future.

It is difficult to say to what extent temporary energy supply issues are actually affecting China. After all, during the first two months of this year, Beijing imported 15.8 per cent more oil compared to the same period last year. As was the case throughout 2025, China has been replenishing its strategic reserves to protect against geopolitical risks.

At the same time, Beijing is holding talks with Tehran regarding the unimpeded passage of Chinese goods through the Strait of Hormuz. It is not yet clear whether final agreements have been reached between the parties. However, other countries have already begun to use the Chinese factor to enhance security when transiting the strait. By identifying their vessels, cargo and crews as Chinese, they seek to avoid coming under fire from the IRGC. Nevertheless, such ‘know-how’ is unlikely to function reliably and for the long term without official support from Beijing.

The Middle East is important to Beijing in terms of exports of goods and technology, particularly following the deterioration of trade relations with the US. China’s exports to this region in 2025 grew almost twice as fast as its exports to the rest of the world. China’s technological achievements in the field of renewable energy have attracted interest. The United Arab Emirates has become the fastest-growing market for Chinese car manufacturers. Demand for Chinese steel from Saudi Arabia and its neighbours has doubled.

Chinese investment in the Middle East is also growing faster than anywhere else in the world. Chinese financial institutions have provided loans to oil refineries, liquefied natural gas (LNG) production facilities and seaports, and have financed the expansion of oil production, railway infrastructure, power grids, petrochemical plants, goods transport and so on.

However, it cannot be said that the war in Iran has not brought China certain dividends, especially if one thinks strategically rather than in terms of financial gain.

Official Beijing condemned the operation against Iran from the very outset and began calling for an end to the war. The reputation as a global pillar of stability and security is one of the ‘trump cards’ of China’s foreign policy. Through this unique form of ‘soft power’, it seeks to win over other countries, strengthen its geopolitical influence and improve its economic prospects. In many cases, this is an effective factor, particularly when compared to Washington’s unpredictability.

Of course, Taiwan and Beijing’s policy of escalating the situation surrounding the island are an exception. However, Washington’s large-scale military action in Iran is, in this regard, not only a temptation for Beijing but also a serious deterrent.

The rift between Moscow and Beijing, so desired by US President Donald Trump, has also been put on hold, at the very least, and in the event of a protracted war with Iran, it is called into question. After all, with the reduction in energy supplies from the Middle East, Russia is becoming even more attractive. Consequently, Moscow’s already excessive trade dependence on Beijing is intensifying. Unfortunately, this may also strengthen the strategic ties between the two capitals.

Nor should China’s strategic ties with Iran be considered lost, at least until Islamists seize power in that country – a scenario that is not yet on the horizon. Given Beijing’s close ties with Middle Eastern countries, its unique opportunities for peacemaking in the region remain intact. This is particularly true against the backdrop of Washington’s increasingly controversial reputation.

In theory, one could also predict an increase in Beijing’s global influence due to its ability to ensure safe passage through the Strait of Hormuz. False signals about a ‘Chinese footprint’ may well be replaced by official Chinese protection.

Thus, a war in Iran will not destroy the ‘axis of evil’, but it could significantly alter the distribution of roles within it, and in a way that strengthens China.