search
Morielle Lotan
Morielle is the founder of Mile Advisory and the CEO of the ADIR Challenge Foundation, innovating the combat of antisemitism & hate.

Iran’s energy gamble: Are we looking at China?

Iran’s threats to target Israeli gas infrastructure have sparked widespread speculation of an energy conflict. But the real issue at play isn’t a regional struggle over resources or energy independence. It’s about economic vulnerability and strategic posturing. And while many are focusing on the confrontation between Tehran and Tel Aviv, perhaps the most telling signals may actually come from Beijing. As the largest importer of Iranian oil, China’s reaction could be the strongest indicator of how serious the threats really are.

The Fragility of Iran’s Economy:

Iran’s economy is precariously reliant on oil exports. Selling roughly 2 million barrels a day at $70 a barrel, Iran brings in around $140 million daily. This revenue is the lifeline that supports the regime, funds its regional operations, and keeps its internal apparatus stable. Any prolonged disruption—whether due to sanctions, geopolitical maneuvers, or retaliatory strikes—would be catastrophic. Even a three-month halt in oil sales could strip Iran of nearly $14 billion in revenue, which would send shockwaves through its fragile economy.

This reliance makes Iran’s threats to attack Israeli energy assets more of a desperate gamble than a credible deterrent. Any escalation that leads to a retaliatory strike on Iran’s oil infrastructure could devastate the very foundation of its economy. So, why take the risk? The answer lies not in Iran’s regional power play, but in its relationship with its biggest customer: China.

China’s Strategic Role:

China purchases nearly 80-90% of Iran’s oil, making it the largest importer of Iranian crude. This relationship is more than just economic—it’s the backbone that sustains Iran’s revenue and, by extension, its ability to project power regionally. Iran’s Oil Exports Continue to Rise. Chinese “teapot” refineries, which buy most of this oil, thrive on the heavy discounts offered by Iran. These small refineries operate independently of China’s major state-owned enterprises, making them less vulnerable to US sanctions and international pressure.

Despite the volatility in the region, China has maintained its oil imports from Iran and even increased them over the past year. Beijing has consistently positioned itself as a neutral facilitator in the Middle East, cultivating relationships with both Iran and its regional rivals, including Saudi Arabia. This strategy has allowed China to capitalize on discounted oil while staying above the fray of regional conflicts. 

But Beijing’s continued engagement—or any potential shift—could tell us more about Iran’s true position. If China maintains its imports, it may signal that Beijing doesn’t see Iran’s threats as credible enough to destabilize the oil market. However, if Beijing starts to quietly pull back on Iranian oil, it could suggest that China perceives an escalation as a real risk and is beginning to hedge its bets.

Why China’s Response Matters:

Watching how China maneuvers in the coming months can provide crucial insights. China’s move toward energy diversification and efforts to reduce reliance on unstable partners like Iran is not just about securing its own energy independence—it’s about gaining leverage over regimes whose stability is built on a critical, yet singular production and export- foundation. A shift in China’s purchasing patterns, even a subtle one, could indicate that Beijing sees Iran’s position as increasingly untenable.

Should China choose to reduce its imports, Iran could be left scrambling for new buyers—something that’s far easier said than done under current conditions. This could push Iran into a corner, making its threats even more desperate and potentially destabilizing. If Beijing signals a change in its strategy, it could serve as a warning sign that Iran’s threats are no longer being taken at face value.

About the Author
Morielle I. Lotan is an executive leader with nearly 15 years of expertise in Strategy, Research, Business Development, and Project Management. Born in New York and raised in both NY and Israel, she has moved between the countries six times, fostering a deep commitment to strengthening the strategic relationship between Israel and America. Morielle founded MILE Advisory, focusing on energy, security, and technology, and acted as the head of strategy for nT-TAO, Israel’s premier nuclear fusion startup. She is also an angel investor, advisory board member, and serves as the CEO of the ADIR Challenge Foundation, a technology and innovation non-profit dedicated to innovating the combat of antisemitism, that was established in honor of her nephew, Addir Mesika who was murdered on October 7th, 2023 at the Nova Festival.
Related Topics
Related Posts