China reshapes energy strategy amid oil supply shifts

China is restructuring its energy landscape in response to geopolitical instability and shifts in oil supply chains. Disruptions centered around Kharg Island are creating a domino effect, as decreased offers of Iranian crude force Chinese independent refineries, particularly the 'teapot refineries' in Shandong, to seek alternative sources.

To mitigate these risks, Beijing is increasing its reliance on Russian crude, though logistical and refining challenges in Russia limit its ability to fully compensate for the loss of Iranian supplies. Simultaneously, China is reinforcing its energy security through a new five-year plan (2026-2030) for the coal industry. Published by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA), the plan positions coal as a vital buffer against external hydrocarbon shocks and Middle Eastern market volatility, ensuring national stability ahead of China's goal to peak carbon emissions before 2030.