China's Middle East push reveals resource vulnerabilities

Global Watch | 2026-03-18

China's surging investments in the Middle East underscore a quest for energy security amid domestic shortages, with under-the-radar deals shielding Beijing from potential US dominance.

In a region traditionally dominated by Western powers, China's footprint is expanding.

While global headlines focus on conflicts, Beijing's maneuvers in the Middle East target a less-discussed imperative: securing the resources necessary to fuel its economy.

China relies on imports for more than 70% of its oil needs.

Domestic production peaked years ago, forcing Beijing to look abroad. The Middle East, holding over half the world's proven oil reserves, is central to this strategy.

In 2022, 53% of China's crude imports came from the region, with Saudi Arabia and Iraq as top suppliers.

Shaping policy

This dependency shapes policies centered on diversification and partnerships.

Beijing, for example, caps imports from any single country at 20% to avoid overreliance. Its policies also promote renewables and stockpiling, but fossil fuels remain dominant.

At the same time, Beijing has funneled billions into infrastructure through the Belt and Road Initiative (BRI), ranging from ports in the UAE to renewable energy plants in Jordan.

In Iran, China pledged $400 billion over 25 years for oil access and petrochemicals, with investments front-loaded for 2020-2024. Meanwhile, in Iraq, Beijing also secured $10.5 billion in BRI contracts in 2021, targeting infrastructure in Kurdistan.

In the UAE, Beijing is investing in nuclear and solar power, positioning itself as a primary supplier as Gulf states shift away from oil.

In 2018, China overtook the United States as the top investor in Arab countries, pouring $29.5 billion -- 31.9% of Foreign Direct Investment inflows.

The infrastructure push mirrors Beijing's broader effort to secure trade corridors beyond the Middle East, including the BRI-linked "Polar Silk Road".

Yun Sun of the Stimson Center, in a March article published in Foreign Affairs, underscores the focus: "China's interest in Iran is first and foremost about energy security."

Beijing's ties are "transactional," aiming to build leverage through economic interdependence rather than alliances, as Jonathan Fulton of the Atlantic Council wrote in March 2025.

US dominance poses threat

If the United States tightens control over Middle Eastern resources, China's economy faces existential risks.

Maritime chokepoints like the Strait of Hormuz carry half of Beijing's oil imports. US naval presence could disrupt flows, echoing concerns from PLA planners.

Economic policies reflect this fear. Beijing is diversifying its suppliers by boosting ties with Russia and Africa, but the Middle East remains unmatched.

A US-led blockade or an escalation of sanctions could spike prices, hitting China's manufacturing base.

Beijing's strategy blends caution with ambition. By embedding itself in regional economies, China builds buffers against US moves.

Yet as tensions rise, this resource quest could spark wider rivalries.