Evidence that China is a Winner Nation, Capable of Enduring Without the Strait of Hormuz

When many Asian countries are anxious about the potential closure of the vital global oil route in the Strait of Hormuz, China’s position is considered relatively safer. The country, which is the largest oil importer through that route, is regarded as one of the most prepared to face energy supply disruptions.

China consumes a vast amount of oil from the Gulf region and imports nearly as much as the combined imports of India, Japan, and South Korea. However, while other Asian countries urge their citizens to conserve energy—from shorter showers to working from home—official media of the Chinese Communist Party states that the country has its own “energy rice bowl”.

The editorial does not mention that Beijing has unofficially restricted fuel exports to conserve supplies. Nevertheless, China is considered more protected than many of its neighbours thanks to years of policies that reduce vulnerability to energy shocks.

China has an electric vehicle fleet almost equal to the rest of the world combined, large and growing oil reserves, diversified energy supplies, and an almost entirely self-sufficient power grid thanks to domestic coal and renewables.

According to Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air, the current situation aligns with China’s long-term planning.

“The current situation really approaches what Chinese planners have been planning for decades,” he said, as cited by Reuters on Thursday (2/4/2026). “It validates the push to reduce dependence on seaborne fossil fuels.”

By the end of 2020, Beijing targeted electric vehicle purchases to reach 20% of new car sales by 2025. However, last year, electric vehicle sales already accounted for half of all new vehicles.

This unexpected boom has caused China’s fuel consumption to peak after decades of rapid growth. The country now burns and imports less oil than estimated a few years ago.

The oil replaced by electric vehicles last year is estimated to be equivalent to China’s import volume from Saudi Arabia, according to estimates from the Finnish energy research institution.

China’s power grid is also almost entirely supported by domestic coal and rapidly growing renewables. Clean energy growth has even exceeded Beijing’s targets, so nearly all additional annual electricity needs are met by new solar or wind projects.

This condition reduces the need for coal and liquefied natural gas (LNG) imports, especially in some coastal provinces that previously relied on those fuels.

In addition, although China imports large amounts of oil, unlike other Asian importers, Beijing avoids dependence on a single supplier. In comparison, Japan buys nearly 80% of its oil from Saudi Arabia and the United Arab Emirates. China sources a similar share from eight different countries.

Beijing also purchases discounted oil from Russia, Venezuela, and Iran—countries sanctioned by the United States and thus avoided by most buyers.

Some of these imports are channelled into secret strategic oil reserves. Their exact size is unknown, but together with stocks held by commercial refineries, China is estimated to have reserves sufficient to replace imports through the Strait of Hormuz for about seven months.

China’s domestic oil production also reached a record 4.3 million barrels per day last year, equivalent to about 40% of total imports. However, domestic oil reserves are depleting, so it is unlikely that China will replicate the US shale oil boom.

According to Chen Lin, Vice President of oil and gas research firm Rystad Energy, China’s oil demand is likely to peak soon.

“China’s oil demand is likely to peak this year and then decline,” he said. “So even though the import share remains high, the situation is unlikely to worsen.”

Natural gas tells a different story. Domestic production is increasing rapidly, so along with pipeline imports, China now imports less LNG than in 2020.

China’s energy pipeline network enables diversification from sea routes with supplies from Russia, Central Asia, and Myanmar. The ambitious plan for the new Russia-China pipeline, Power of Siberia 2, will still take several years to complete.