How the Iran War and US Policy Are Reshaping—and Threatening—China’s Economy

New energy shocks from the Middle East are accelerating structural changes inside China’s energy grid.

Tankers sail near the Strait of Hormuz, as seen from northern Ras al-Khaimah, United Arab Emirates, near the border with Oman, on March 11, 2026, amid the U.S.–Israeli conflict with Iran. Reuters

Commentary

The ongoing conflict surrounding Iran and the broader U.S. effort to reshape global energy flows is having a significant, lasting impact on China’s economy. As the world’s largest energy consumer and importer of crude oil, it is particularly vulnerable to disruptions in Middle Eastern supply routes and price volatility in global oil markets.