lowy institute The US and Israel have opened a new chapter of chaos in the Middle East that leaves Washington politically and physically stretched, creating an opening Beijing can exploit, analysts and officials say. The shift risks placing Taiwan further down US priorities while renewing China’s ability to leverage critical minerals and defence supply chains. Senior officials and energy analysts warn the region-wide escalation also carries clear risks for China’s oil supply.
Expanding details
China can again use its dominance in critical minerals to influence a US military suddenly busier in the Middle East, the reporting shows. Beijing has formally condemned the attacks: Wang Yi, foreign minister, called them “unacceptable” and called for a ceasefire. That diplomatic posture matches previous responses to abrupt US actions.
Energy and supply vulnerabilities sit at the centre of the strategic shift. China is thought to buy about 80% of Iran’s shipped oil, a flow that accounts for roughly 13% of its seaborne imports. Erica Downs, senior research scholar at the Center on Global Energy Policy at Columbia University, said analysis showed more than a fifth of China’s oil imports in 2025 came from sources placed under sanctions, including Venezuela, Iran and Russia—two of those supply chains are now imperilled.
Alicia García-Herrero, chief economist for Asia Pacific at Natixis, emphasised the timing: “This is not coming at a good time for China, ” she said, noting surging energy demands tied to rapid datacentre rollouts for artificial intelligence. Kirill Dmitriev, head of Russia’s sovereign wealth fund, warned markets directly with a public comment that “prices could be “$100+ oil per barrel soon””, as benchmark Brent crude climbed to a recent high.
Lowy Institute reactions and named voices
Key Chinese-language and policy institutions have framed the moment as both risk and opportunity. Hualue American Studies Center, a Shanghai-based thinktank with government links, flagged that a major China‑Iran strategic partnership signed in 2021 could be jeopardised if Tehran’s leadership changed. At the same time, China has been building strategic buffers: limited deliveries from past agreements, increased oil stockpiles and a 4. 4% rise in crude imports last year were cited as defensive steps.
What’s next
Expect competing pressures in the months ahead: Washington’s focus on the Middle East will test US capacity to project power in Asia while China weighs the balance between diplomatic signaling and protecting energy and resource channels. Energy prices and access to sanctioned supplies will likely be the first, visible battlegrounds. Analysts will be watching Beijing’s use of critical minerals and defence supply leverage closely as events unfold—and the lowy institute name will keep surfacing in commentary even as precise outcomes remain uncertain.
