Trump’s shake-up of the global energy system will only spur Xi to build the ramparts even higher, ensuring the country can run as much as possible on energy and fuel sourced within its own borders rather than abroad.
“Energy security … really keeps Chinese leaders up at night,” says Jane Nakano, of think tank Centre for Strategic and International Studies.
Trump’s actions in Venezuela and Iran have “confirmed to China’s leaders that they’ve been doing the right thing”, she adds.
On state television this week, Xi said China had “gained a profound grasp of global energy development trends” – code for just how damaging the Hormuz crisis has been. Beijing had now taken “major decisions by advancing the new energy security strategy in depth”, he added.
Nobody has yet spelt out what this means in practice. However, Anders Hove, from the Oxford Institute of Energy Studies, expects new targets and policies to emerge without fanfare.
After previous energy shocks, China did not make any major new announcements, he says. “And when policies were introduced, they were not described as a response to these events externally. However, there were major policy changes, and I think that the same thing will happen in this case.”
‘Crisis they’re in now’
The Iran war differs from previous energy shocks because this one confirms the policy direction, rather than challenging it. This means it could prove to be the most “consequential” energy crisis China has experienced, Hove believes.
While Ed Miliband is arguing that the Iran crisis means Britain must double down on renewable energy, in China, the revived dash for energy security is likely to play out across all forms of energy.
In oil and gas, the authorities will speed up a push to fully explore and exploit China’s own resources.
This began in 2019 and since then, three Chinese state-owned oil majors have already boosted reserves by between 20pc and 100pc. Oil production in the South China Sea has risen almost 50pc, and other key fields’ output has climbed by a third.
“As an ex-geologist who worked for BP in China 30-odd years ago, it surprised me. But they poured in a lot of effort,” says Philip Andrews-Speed, of the Oxford Institute of Energy Studies.
“They’ve been quite successful in at least capping their import dependence, and having the resilience to deal with the sort of crisis they’re in now.”
Domestic natural gas production hit a record last year, rising 6pc to 262 billion cubic metres. This year, China will probably overtake Iran, behind only the US and Russia as a gas producer.
