China banks on diverse suppliers as Hormuz crisis tests oil security

China is deploying a carefully constructed two-pronged strategy to shield itself from the oil supply disruptions caused by escalating regional tensions in the Middle East, according to analysis of trade data and energy policy.

As the world's largest crude oil importer, Beijing has long recognised the vulnerability of its dependence on Middle Eastern supplies, with about 40 per cent of imports historically flowing through the Strait of Hormuz before recent disruptions. The strategy combines aggressive diversification of supplier nations with the maintenance of massive strategic petroleum reserves.

Supply lines shifting from Persian Gulf

The closure of the strategically critical Strait of Hormuz in recent months has forced a significant reorientation of China's energy procurement patterns. Customs data reveals that crude imports from Gulf states declined by approximately 25 per cent as tensions escalated between US, Israeli and Iranian forces from late February onwards.

However, rather than facing immediate supply shortages, China has rapidly redirected its purchasing power towards alternative suppliers. Russian oil exports to China have increased substantially, whilst Brazilian shipments have also expanded to fill the gap left by Gulf disruptions.

The approach appears to have helped China absorb at least the initial shock after disruption to the Strait of Hormuz, one of the world's most critical oil choke points.

Strategic stockpiling provides crucial buffer

Beyond diversifying its supplier base, China has invested heavily in building substantial strategic and commercial oil reserves over the past two decades. This dual inventory system—comprising both government-controlled strategic petroleum reserves and commercial storage operated by state-owned enterprises—provides crucial breathing room during supply disruptions.

The significance of this strategy extends beyond Chinese energy security. As Australia's largest trading partner and a major consumer in the Asian region, China's ability to maintain stable oil supplies has implications for regional economic stability and energy prices affecting Australian consumers and businesses.

Structural vulnerabilities remain

Experts caution that whilst China's diversification approach has proven effective in the immediate term, structural vulnerabilities persist. The nation's energy consumption continues to grow, and no amount of storage reserves can permanently substitute for steady supply flows.

The redirection of supplies from the Middle East to alternative sources such as Russia and Brazil also carries geopolitical dimensions, potentially reshaping long-term energy relationships and trade patterns across the Indo-Pacific region.

This article was originally reported by ABC News on 30 April 2026.