Iran Needs China More Than China Needs Iran

China isn’t happy about the looming conflict between the U.S. and Iran but it’s in no mood or position to give its ally in Tehran much of a lifeline. 

This reluctance to take a firm stand shows that Beijing is playing it safe. The approach reflects a broader, calculated strategy to avoid entanglement in regional security disputes and resist binding commitments. More importantly, it underscores a stark economic reality– Iran needs China far more than China needs Iran.

Trade data illustrate the imbalance. China has been Iran’s top export destination since 2019 and its largest source of imports since 2014. Yet Iran accounts for less than 1% of China’s total global trade.

Oil lies at the core of the relationship, even if much of it moves covertly. Officially, according to MBN’s China Tracker, Chinese imports of Iranian crude fell to zero after U.S. sanctions were reimposed in 2018. In practice, shipments continued.

According to Kpler, a data analysis firm, Iranian oil — often relabeled as Malaysian — accounted for roughly 13.4% of China’s seaborne crude imports in 2025, about 1.38 million barrels per day. This month, Kplers and cargo tracker Vortexa both reported a decline of Chinese purchase of Iranian oil compared to January. China is turning to Russia for more oil instead. 

Even here, the relationship is transactional rather than strategic. The crude is largely purchased by independent “teapot” refiners operating on thin margins, not by China’s largest state-owned firms. Iran supplies discounted barrels; China provides revenue.

In 2021, the two countries agreed to a 25-year “comprehensive strategic partnership” that envisions up to $400 billion in Chinese investment.  Delivery, however, is seen as modest.

China has also focused its main global development program, the Belt and Road Initiative, elsewhere. Saudi Arabia, Egypt, UAE and Iraq have all benefitted more from the BRI than Iran.

Beijing’s broader diplomatic posture reinforces this hierarchy of priorities. China has cultivated deep ties with Gulf states such as the United Arab Emirates — home to a sizable population of Chinese expatriates. Last year, Chinese Foreign Minister Wang Yi publicly backed the Emirati position in a dispute with Iran over three islands near the Strait of Hormuz, a move that irritated Tehran.

The diplomatic friction may be overlooked if reports this week – suggesting Iran may soon finalize a deal to import supersonic anti-ship missiles from China – come to pass. Thus far, China has been a relatively modest supplier of arms to Iran, though the U.S. was concerned sales could increase even before the talk of potential missile transfers. 

Chinese state media gave prominent coverage to the “Will for Peace 2026” joint exercise held by BRICS countries in South Africa last month. However, they downplayed the joint military drill conducted by Russia and Iran in the Gulf of Oman and the northern Indian Ocean on February 20, conspicuously omitting whether China participated.

Tensions between Iran and Washington remain acute as President Trump presses Tehran to abandon any pursuit of nuclear weapons, backed by a steady buildup of U.S. naval assets in the Gulf. 

Iranian Foreign Minister Abbas Araghchi said this week that negotiators in Geneva were close to a deal. Trump, in his Feb. 24 State of the Union address, said talks were ongoing but insisted Washington had yet to hear Tehran commit to permanently abandoning nuclear weapons.

As ever, China prefers the status quo to conflict. It values access to Iranian energy but has worked to avoid sanctions risks and regional instability. Iran, facing isolation from Western markets, depends far more heavily on China’s willingness to engage.