Beijing has more at stake in Iran besides just oil

Beijing has far more at stake in Iran besides just oil. China has not only benefited from importing heavily discounted Iranian crude, it has inched up its strategic infrastructure investments into the country since the duo signed a $400 billion pact in 2021. If the regime in Tehran is severely weakened or changes, China also will lose a key diplomatic lever in the Middle East.

Despite Washington's efforts to use sanctions to curb oil exports from Iran, it has become an increasingly important supplier to China. Crude shipments to the People's Republic from Malaysia, a major trans-shipment hub, have tripled to 70 million tonnes last year from 2021, according to data from the Chinese Customs – third after Russia and Saudi Arabia.

Moreover, Iran's strategic location makes it a crucial cog in President Xi Jinping's signature Belt and Road policy to enhance his country's physical and economic connectivity with the world. As of 2023, China accounted for 3 percent of Iran's $6 billion worth of foreign direct investments.

That pales in comparison to, say, Russia's 27 percent contribution, but China is ramping up its support in other ways: Iran has turned to the People's Republic for "thousands of tons of ballistic-missile ingredients", for instance, to build its military prowess, the Wall Street Journal reported in June, citing sources. The trio also conducts regular joint naval drills together.

Despite Washington's efforts to use sanctions to curb oil exports from Iran, it has become an increasingly important supplier to China

The escalating conflict threatens to undermine Beijing's nascent ambitions in Gulf politics too. Just two years ago, Chinese diplomats hailed a "new paradigm" for resolving friction in the Middle East after they brokered a deal to restore diplomatic ties between Iran and Saudi Arabia.

War also throws up a fresh test of China's diplomatic ties further afield too. Iran joined the Shanghai Cooperation Organisation in 2023. However, India, a founding member, on Saturday issued a rare public rebuttal of the SCO's statement denouncing Israel's attacks, underscoring a potential rift between Xi and Indian Prime Minister Narendra Modi, who has fostered closer ties with Israel.

The danger for China is this could be a moment that ultimately erodes its ambition to project power in the region and one that gives rise to rival infrastructure projects, such as the ambitious India-Middle East-Europe Economic Corridor, aimed at diluting Beijing's influence. For now, it appears the reshaping of the Middle East may not work in its favour.

The Chinese embassy in Israel has urged Chinese citizens to return home or leave the country via land border crossings as soon as possible, on grounds that the security situation has deteriorated, the embassy warned in a notice on WeChat on June 17.

China opposes any actions that infringe upon Iran's sovereignty, security and territorial integrity, and is against intensifying conflicts and escalating tensions, a spokesperson for the foreign ministry said on June 13.