Is China’s reliance on Middle Eastern oil excessive?

China has become more and more dependent on Middle Eastern crude oil in recent years. China’s vulnerability affects the entire world because so many countries depend on China for a wide range of goods. This excessive reliance on oil from the Middle East is going to have a significant impact on both geopolitical and oil markets until China can figure out a way to diversify its supplies to reduce risk.

According to research released in December 2021, China was becoming more dependent on Middle Eastern energy. China, which surpassed the United States to claim this title in 2017, is the largest oil importer in the world, obtaining more than 70% of its supply from abroad. And in 2020, for $176 billion, about half of this oil—roughly 47 percent—will originate in the Middle East. The primary oil supplier was Saudi Arabia, which supplied around 15.9% of all its imported crude in 2020 at the cost of about $28.1 billion. Other Middle Eastern nations that provide goods to China include Iraq, Oman, Kuwait, and the UAE. China has also been importing crude from the oil-rich nation of Iran despite sanctions against it.

China has been attempting to increase oil output for many years to decrease its import dependency and diversify its energy sources. Following a decline in imports from Russia, Brazil, and the United States, China’s reliance on Middle Eastern crude expanded dramatically in the first quarter of 2022. With nearly 30% of China’s oil supply coming from Europe, that continent is the country’s second-largest oil supplier.

The pact intends to strengthen the two “countries” cooperation in the energy sector. According to Ayham Kamel, head of Eurasia Group’s Middle East and North Africa research team, energy cooperation will be at the forefront of all negotiations between the Saudi and Chinese leadership. Saudi Arabia’s leading trading partner is still China, and Saudi is China’s key oil supplier. According to Ayham Kamel, head of Eurasia Group’s Middle East and North Africa research team, all discussions between the Saudi and Chinese leadership will focus on energy cooperation. Given the size of the energy revolution in the West, he continued, “There is a significant acknowledgment of the need to develop a framework to ensure that this interdependence is accommodated politically.”

However, some are concerned that China’s overwhelming reliance on one area, and one state power in particular, may leave it vulnerable, which might have an impact on the rest of the globe, which depends on China for a variety of products. The Organization of the Petroleum Exporting Countries (OPEC) set export quotas, which prompted the United States to denounce Saudi Arabia’s dominance of the global oil markets. However, some are concerned that China’s overwhelming reliance on one state power may make it vulnerable, which might then have an impact on the rest of the globe, which depends on China for a wide range of goods.

Since Chinese leader Xi recently visited Saudi Arabia to ensure the future of their cooperation, China’s significant reliance on the Middle East for its oil supplies appears to be here to stay.