Cheap oil and important trade routes: What can China do for its key partner Iran in the event of an open war in the Middle East?

 Cheap oil and important trade routes: What can China do for its key partner Iran in the event of an open war in the Middle East?

Israel and Iran have been engaged in a series of attacks on each other since the conflict began last Friday. China has accused US President Donald Trump of “fueling the war.”

On the one hand, amid talk of a US attack on Iran, US President Trump has said that he will decide on it within two weeks, while on the other hand, amid rising tensions, China and Russia have advised their citizens to leave Israel immediately.

It should be recalled that when Israel carried out airstrikes on Iran on Friday, China’s first reaction was that Israel had “crossed a red line.”

A day later, on June 14, the Shanghai Cooperation Organization (SCO) issued a statement condemning the Israeli attack on Iran. China plays the most important role in the Shanghai Cooperation Organization, but India distanced itself from this statement.

The Shanghai Cooperation Organization was founded in 2001 by China, Russia and four Central Asian countries – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Currently, a total of ten countries, including India and Pakistan, are members of this organization.

On June 15, Chinese Foreign Minister Wang Yi spoke with Iranian Foreign Minister Seyyed Abbas Araqchi. According to a statement issued by the Chinese Foreign Ministry, “China considers this attack a violation of Iran’s sovereignty, security and territorial integrity, and China firmly opposes targeting Iranian personnel and killing civilians.”

The statement said, “These Israeli actions are against the laws of the United Nations and the basic principles of international relations. In particular, Israel’s attack on Iran’s nuclear facilities is very dangerous and may have serious consequences.”

Experts on China and West Asian affairs say that China has economic and strategic ties with Iran and would not want to see Iran collapse under any circumstances.

‘Chinese aid’

A Financial Times report on Tuesday claimed, citing sources, that two Chinese cargo planes had arrived in Iran.

The report quoted China affairs journalist Jennifer Zeng as claiming that ‘the two cargo planes had turned off their transponders as soon as they entered Iranian airspace to avoid being identified in order to evade sanctions imposed on Iran.’

However, there was no response from the Chinese government on this, nor has it been confirmed by any other source.

The latest tensions began a week before the Wall Street Journal published a report claiming that Iran had placed orders from China for large quantities of ammonium perchlorate, a fuel for ballistic missiles, to be delivered in the next few months.

This news is also based on sources and cannot be independently verified, but experts say that China has been helping Iran in technical and other matters for years and that this is nothing new.

Cooperation between China and Iran

He told  that for some time now, Iran has been supplied with ballistic missile parts or fuel from China. ‘In fact, China has also helped in ballistic missile technology, while the sanctions include not only nuclear missiles but also ballistic missiles.’

He said, ‘The metal in ballistic missiles that is capable of withstanding the heat of the rocket at high altitude is supplied to Iran from China. Iran does not have the capacity to manufacture it and the transponders also come from China and come in different parts. They have been reaching Iran through different routes in the past.’

According to Iran’s Tasnim News Agency, the first cargo train from China reached Iran’s dry port on May 25 last month.

In fact, in 2021, a $400 billion deal was signed between China and Iran under the Belt and Road Initiative (BRI), and it is said that the China-Iran Rail Corridor is a part of it.

Through this freight corridor, Iran, which is under sanctions, will be able to sell oil to China and import goods from there easily.

The United States and Western countries have imposed a ban on buying oil from Iran, while China is taking advantage of this opportunity to import Iranian oil on a large scale at cheap rates.

This is why, despite the sanctions, Iran’s oil exports remained at an all-time high of $35.8 billion during the first quarter of 2024. This was stated by Iran’s customs chief himself.

According to a report last year by the US House Finance Committee, 80 percent of Iran’s oil exports go to China, and it buys 1.5 million barrels of oil from Iran daily.

Although China uses darknets and untraceable payment methods to evade international sanctions, it is true that China has saved billions of dollars by buying cheap Iranian oil.

“In recent times, China has increased its trade and economic relations with Iran, but it has a larger strategic objective behind it,” says Arvind Yeleri.

“Chinese President Xi Jinping established relations with Iran through fuel and trade in the early 2010s. These relations are being pursued today to fulfill China’s strategic ambitions. The investment China has made in strategic infrastructure in West Asia is remarkable.”

“West Asia has oil reserves, it needs a buyer. China is not just a buyer, but has been mining, refining, etc. for years. In addition, China has created an active transportation system and a complete consumer market.

 

According to Arvind Yelari, Iran plays an important role in China’s ambitions for strategic dominance in West Asia. The China-Iran rail corridor is an example of this.

Tasnim News reported that on May 12 last month, the railway ministers of six countries, including Iran, Kazakhstan, China, Uzbekistan, Turkmenistan and Turkey, held talks on a railway network connecting Central Asia to Europe.

The report also claims an agreement on tariffs and other issues related to the rail network. Arvind Yelari says that it is important to view Iran-China relations from the perspective of China’s strategic ambitions.

China's Interest in West Asia and Iran's Need

The land route to Iran is very important for China to establish its trade access to Central Asia and West Asia.

According to Arvind Yalari, ‘China takes the sanctions imposed by the West as an opportunity and that is why China supports countries like Libya, Syria and Iran but this cannot be just an economic interest, these are political and geographical interests and China intends to take it forward.’

He says that ‘That is why in the event of a military action against Iran, China will be ready to bear this loss in view of its vast political interests and it is also likely that despite suffering heavy losses, China will continue to invest the most in the region.

He says that ‘It is true that the fall of the current Iranian regime could prove to be a major setback for China, but it has not invested as much in any other region as it has in West Asia, not even in Africa.’

‘China is trying to build a land route from Central Asia to Europe to bypass the Arabian Sea and the Pacific Ocean sea route. This will also reduce time and cost.

The China-Iran rail corridor is part of China’s ambitious East-West Corridor project to connect Asia with Europe, and instability in West Asia could hinder its plans.

According to Arvind Yeleri, “Israeli Prime Minister Benjamin Netanyahu has reiterated his commitment to regime change in Iran after the latest attack, but China will not want the Iranian regime to fall under any circumstances.”

What can China do if war breaks out?

After leaving the meeting midway and leaving for Washington, Trump made one post after another on social media.

In one post, he wrote that ‘We now have complete control over the skies of Iran. Iran had good sky trackers and other defense equipment in large quantities, but they cannot compete with the equipment manufactured by the United States.’

The biggest question in such a situation is what will be China’s response if the war escalates further?

Dr. Fazlur Rehman Siddiqui, Senior Research Fellow at the Indian Council of World Affairs, believes that China is not in a position to do anything other than make strong statements in the conflicts in West Asia.

He told  that ‘China’s presence in West Asia is about a decade and a half old, while the United States has been directly present there since 1945. Israel and the US are still in the driving seat in the geopolitics of West Asia.

Dr. Fazlur Rehman Siddiqui says that ‘China is a permanent member of the UN Security Council but for the first time it vetoed a West Asia issue together with Russia in the case of the then Syrian President Bashar al-Assad, when a proposal was made to impose sanctions on him for war crimes.’

According to him, ‘China is still not in a very good position in this region without Russia. The US has a long experience in the region, an impressive military presence, including several US military bases, but apart from the economic aspect, Iran is not that important in China’s design.’

However, Arvind Yeleri says that ‘China can provide medical or other assistance to Iran and it is likely that it will continue to supply this.’

Arvind Yeleri says that ‘China’s strategy has been that wherever it is needed, it helps through supply lines, the Russia-Ukraine war is an example of this. He is not directly involved in military clashes.