Rising tensions in the Middle East have reignited fears of an Iranian blockade of the Strait of Hormuz, a vital oil shipping route. This potential closure could significantly impact global energy markets and specifically China, the largest oil importer. Despite traditionally relying on Middle Eastern oil, China’s recent energy diversification, including increased imports from Russia and Saudi Arabia, provides a buffer against possible disruptions. Additionally, China's slowing economy is softening oil demand, which further lessens the impact of potential supply issues.
China's active diversification of energy sources and bolstering of domestic reserves can buffer the country against immediate shocks from any Hormuz-induced closure.
Chinese firms increasingly see Iran as a 'price-competitive yet high-risk' supplier, prompting a shift to more stable alternatives like Russia for crude oil.
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