Beijing —
For more than a decade, leader Xi Jinping has overseen the transformation of China’s economy with one goal: energy security.
With that vision, China has unleashed a renewable energy revolution with wind, solar and hydropower, drilled ever deeper offshore and offshore oil fields, and struck deals with partners seeking more supply, all to reduce dependence on imported fuel and protect against “external shocks.”
The current historic oil crisis caused by the US-Israel war against Iran is presenting China’s Promethean efforts towards energy self-sufficiency with its toughest test yet. China appears to be passing this test.
While fuel-poor countries across Asia compete for supplies, China, the world’s biggest energy importer, has huge oil reserves, its industrial sector runs largely on domestic energy and its car fleet is increasingly powered by electricity rather than gas.
For China, its ability to weather the energy shock of weeks of war “kind of validates everything they’ve done to strengthen their energy security,” says Erica Downs, a senior fellow at Columbia University’s Center on World Energy Policy.
“There are so many things they can look back on and say, ‘We made the right decision.'”
This vindication for China comes as the United States retreats from its push toward renewable energy and electric vehicles, creating a wide divergence between the world’s two major economies’ models of power.
Since becoming a net energy importer in the early 1990s, China has viewed its dependence on the Middle East as a dangerous vulnerability.
Leaders are eyeing the narrow waterways through which this fuel flows, such as the Strait of Malacca, as potential choke points should a future adversary seek to strangle Beijing’s supplies.
To reduce its dependence on sea routes, China has built expensive pipelines in recent decades to bring oil and gas overland from Central Asia, Russia and Myanmar. China is also diversifying its supply sources, with Russia rising to the top of China’s list of oil suppliers following Russia’s invasion of Ukraine.
But while his predecessors focused on expanding China’s oil and gas sources, Mr. Xi has also sought to completely reduce China’s external dependence.
China must “adhere to worst-case scenario thinking,” is Xi’s maxim, a phrase he often repeats when ordering top officials to prioritize national security in the face of an increasingly hostile and unstable world.
Under the Xi administration, the Chinese government has stepped up its initial efforts to both increase green energy and reduce dependence on fossil fuels, further increasing government support for renewable energy and EVs.
Vast solar and wind farms are now being built at a breakneck pace along China’s highland hinterlands and coastlines. A domestic factory has cracked the code for making cheap batteries for the electric cars that are rapidly gaining popularity as replacements for the gas-guzzling electric cars on China’s highways. It helps that China controls the supply chain for the materials needed to make these products.
And the patterns are diverse. The country, which already operates a third of the world’s hydropower capacity, is breaking ground on an ambitious dam project in the mountains of western China, while the government sets its sights on ushering in next-generation technologies such as nuclear fusion and green hydrogen.
Meanwhile, rich coal deposits across northern China’s provinces continue to power power plants and support renewable energy supplies, a reminder that the world’s biggest carbon emitter is not yet kicking its fossil fuel habits.
And even though China runs much of its industry on renewable energy and coal-powered electricity, the state-owned energy giant is drilling deep into the country’s deserts and ocean floor for more oil and gas, while building up oil reserves estimated to last at least several months.
The world’s second-largest economy imports only about 15% of its energy, Chinese analysts suggest. However, China still relies on imports for 70% of its oil and about 40% of its natural gas, and is not immune to the economic turmoil caused by the Gulf War.
Rising jet fuel prices have a ripple effect on airline ticket prices and flight cancellations, transportation costs are rising, and soaring global commodity prices are pushing up factory prices.
Central planners intervened to cushion the rise in petrol and diesel prices. Bloomberg News reported on April 10, citing people familiar with the matter, that the Chinese government has given a state oil company the green light to exploit commercial oil reserves.
And importantly, in the face of weak domestic consumption, Beijing’s efforts at self-reliance have only gone so far for an economy whose vast manufacturing sector relies on healthy overseas demand.
But even as China remains relatively isolated amid historic turmoil in global oil markets, and despite posting strong growth in the first quarter of 2026, Mr. Xi and his planners appear to be growing more confident in their strategy.
“We started early on developing wind and (solar) power, and the path has proven to be positive,” Xi said late last month, according to a report on Chinese state broadcaster CCTV.
China is now by far the leader in renewable energy production, operating three times as much wind and solar power as the next two largest countries, the United States and India, combined, according to research firm Global Energy Monitor.
Even as China continues to rely heavily on polluting fossil fuels to electrify its economy, the share of renewable energy in China’s energy mix is rapidly expanding with the aim of one day overtaking coal. (Critics say the Chinese government should set more ambitious goals to cut coal and meet international climate commitments.)
The rise of electric and hybrid vehicles, which account for more than half of new cars sold in China, has reduced oil demand by more than 1 million barrels a day, according to a 2025 study by Rhodium Group. The International Energy Agency predicts that China’s oil consumption will peak in 2027.
“We used to be concerned about China’s energy security, but now we know that our solution is viable,” said Lin Boqiang, director of the China Energy Policy Research Institute at Xiamen University. “We have renewable energy, we have electric cars, and as oil prices rise, these cars become even more competitive…But without 20 years of investment, we wouldn’t be where we are today.”
Still, President Xi has not abandoned fossil fuels, which are still needed for some industries and transportation. In 2018, as U.S. President Donald Trump took office and trade tensions escalated, he called on China’s energy giants to reconsider their oil and gas production.
China reached record oil production last year as it pumped more crude from aging oil fields, introduced new technology to its extensive offshore reserves in the Bohai Sea and continued drilling miles of deep boreholes into oil fields in western Xinjiang in search of more supply.
Also important to the energy security situation, the government and its oil companies have maintained reserves, increasing exports even before the conflict to accumulate around 1.3 billion barrels as of March, or enough to last three months, according to estimates by trade data firm Kpler.
Muyu Xu, senior crude oil analyst at Kpler, noted how China is weathering the current oil crisis, saying, “The decision to focus on energy security and increase inventory reserves… has paid off well.” “For products like gasoline and diesel, supply should be guaranteed because that is the last line for China.”
Despite Beijing’s “worst-case scenario” planning, the risks to China were high when Iran cut off traffic in the Strait of Hormuz in early March.
About 38% of the oil and 23% of the liquefied natural gas that normally passes through the strait is bound for Chinese ports, according to financial firm Nomura. Overall, this accounts for about half of China’s imported oil supply and one-sixth of its natural gas supply.
But that dependence further highlights China’s resilience and shines a spotlight on the contrast between China’s economic electrification plans and the U.S. model, which some critics have dubbed a “petrostate” because of its dependence on fossil fuels.
Beijing will certainly see an opportunity for this contrast to feed into Xi’s broader message that although today’s world is “full of turmoil,” China (unlike the United States) is a responsible and far-sighted leader in this era.
There are already signs that the world is taking notice.
China’s green technology exports surged in the first quarter of this year, with electric vehicles, lithium batteries and wind turbine products increasing by 78%, 50% and 45% year-on-year, according to official data.
The crisis could also present further opportunities for the sector, which faces restrictions on certain green technology exports to countries such as the United States, Canada and European Union member states.
Closing the Strait of Hormuz “will force countries to reconsider their energy security and move towards increasing domestic energy production,” said Lin of Xiamen University.
And countries that have been reluctant to do so “may need to think twice” about whether they want to take advantage of the battery and wind and solar technologies that China is already producing at scale.
