China Wants to Unplug the Strait of Hormuz

A top Chinese diplomat is advancing a high-stakes proposal to safeguard energy supplies as the conflict between the U.S.-Israel coalition and Iran enters a volatile second week. 

Special Envoy Zhai Jun arrived in Abu Dhabi on March 10 to promote Beijing’s proposed “neutral shipping corridor”— a diplomatic effort to ensure crude oil shipments continue and crude prices are contained.

“All parties have the responsibility to ensure stable and unimpeded energy supply,” Foreign Ministry spokesman Guo Jiakun said Tuesday.

China imports roughly half of its oil from the Middle East. Much of it passes through the Strait of Hormuz, a narrow waterway off Iran’s coast that handles about 20% of global oil trade. Nearly half of those volumes are typically destined for China, making the region’s stability central to Beijing’s energy security.

The urgency of the moment is evident in China’s unusually active diplomacy. Since the Feb. 28 outbreak of fighting between the U.S. and Israel on one side and Iran on the other, Zhai has held marathon talks with Saudi Foreign Minister Faisal bin Farhan and Gulf Cooperation Council Secretary-General Jasem Mohamed Albudaiwi. Beijing has sought to present itself as a neutral broker committed to keeping energy infrastructure out of the crossfire.

At the heart of the push is the “Blue Corridor” initiative, a diplomatic effort to guarantee safe passage for oil tankers and other non-combatant vessels through conflict zones. The concept aims to prevent disruptions in shipments that could trigger global price spikes and further strain China’s economy.

Beijing is prepared for short-term shocks. China reportedly has enough oil stockpiled to cover 120 days of imports, giving it a temporary buffer. But officials are aware that prolonged disruptions through Hormuz would expose vulnerabilities. 

The price of Brent crude, a global benchmark, recently surged toward $120 per barrel before retreating below $90 after U.S. president Donald Trump hinted that hostilities might wind down.

While Foreign Minister Wang Yi has warned against a return to “the law of the jungle,” China’s broad response to the conflict has been deliberately measured. 

Chinese state media has slammed “imperialist aggression.” In a show of support to its longtime ally, Beijing was the first government to acknowledge the appointment of Mojtaba Khamenei as Iran’s new supreme leader.

But the government has stopped short of providing Iran with major military support. Notably, China halted a rumored sale of CM-302 supersonic anti-ship missiles to Tehran, seen as a potential escalator.

Instead, Beijing is working to contain the fallout. On the sidelines of the annual “Two Sessions” meeting in Beijing, Wang took a conciliatory line toward Washington, calling recent talks between President Xi Jinping and President Trump “heartening.”

Zhai’s talks in the Gulf are about protecting China’s broader strategic investments. China has continued to benefit from discounted Iranian oil, often rebranded as imports from Malaysia. Beyond oil, Beijing has invested more than $400 billion into infrastructure and trade partnerships across the region. 

An expanded war would endanger that stake. At the Two Sessions, China’s 2026 GDP target was set cautiously between 4.5% and 5% — a signal that leadership is bracing for global volatility.

China’s restraint reflects a calculated bet: that diplomacy and economic leverage offer more long-term stability than entanglement. Xi’s most powerful tool may not be in the Gulf, but in the sweeping trade deal he’s expected to unveil by month’s end. As long as Chinese energy interests remain protected, Beijing appears willing to let Washington redraw the security map, on one condition: Don’t break the oil flow.