The recent U.S. and Israeli attack in Iran has once again placed the Middle East at the center of global tensions, with outcomes and implications quickly extending beyond the battlefield. One of the most sensitive developments has been the disruption of maritime activity around the Strait of Hormuz, a narrow maritime corridor in the Persian Gulf through which nearly 25% of the world’s oil supply normally flows. Today, the oil flow has been reduced almost entirely (97% decrease), and this situation has caused an increase in the oil barrel price above $100 USD (40-50% increase).
What initially appeared to be a decisive military attempt from the U.S. and Israel to create an immediate regime change in Iran and destroy its military and nuclear capabilities, this prolonged conflict has instead produced a far more ambiguous geopolitical outcome. The early expectation that the attacks and the death of Ayatollah Ali Khameini might trigger a regime change was a miscalculation that has not materialized in Tehran: Iran responded with broader attacks in the region with no Iranian reports claiming an intention to end their missile or nuclear program. In addition, they are still exporting millions of barrels while other traffic is paralyzed, letting only Chinese vessels pass or conditioning the flow to yuan-only transactions, making the Hormuz crisis an economic battlefield. Therefore, contrary to the belief of many, China seems to have economic and military profit from the Hormuz crisis while the crisis continues to grow in Western countries.
A convenient partnership: China and Iran
It is important to understand that the relationship between China and Iran has never been driven primarily by ideology. Instead, it has developed through convenient economic and military cooperation centered largely on energy trade and missile capabilities. During 2021, Xi Jinping signed a 25-year strategic partnership that committed China to invest $400 billion USD in Iran if Iran kept oil flowing under any circumstance, importing +500 million oil barrels during 2025. In the same year, reports from Iranian officials claimed that they closed a deal with Beijing to import CM-302 supersonic missiles, which can hit U.S. aircraft carriers, as they are allegedly capable of flying under the radars.
Recent developments during the Hormuz crisis appear to reinforce this relationship. Reports suggest that Chinese and Iranian officials quickly engaged in discussions aimed at ensuring the continued flow of oil shipments toward the Chinese market and financing Iran’s military response. Even though it is a clearly limited arrangement, it illustrates the depth of Beijing’s influence in the countries around their orbit.
Notably, Beijing has not provided any serious military support to Iran during the crisis, reinforcing the idea of their pragmatic relationship. Some reports suggest China has provided Iran with attack drones and military intelligence to keep their “friendship” on track. However, China has clearly adopted a diplomatic posture that keeps it outside of any military dimension. That absence has been seen by some analysts as evidence that China does not have capable military might to counterbalance events affecting its allies in the world. That interpretation reflects a misunderstanding of China’s long-term geopolitical game: strengthening its own position while allowing its Western rivals to exhaust themselves.
Strategic fatigue: China’s long-term game
Beyond the immediate military dynamics, the war in Iran could be a moment for actors like China and Russia to fatigue their enemies. By remaining outside the conflict, Beijing avoids the political and military costs of intervention while observing how Western powers respond to sustained energy instability. The war forces the United States and Israel to deploy advanced military systems and absorb considerable financial costs while Iran responds with cheap drones. For Chinese strategists, the conflict could be offering a valuable opportunity to study the operational performance, logistical sustainability, and economic burden of the U.S. and Western military power, knowledge that could prove relevant in potential future scenarios involving Taiwan.
Although the Strait of Hormuz is linked primarily to Asian oil demand, the crisis in the European Union is another opportunity for China and Russia. The rise in the oil prices directly poses a threat to an EU already struggling to have access to oil supply following sanctions over Russian oil. Recently, President Trump eased sanctions over Russian oil, allowing countries to buy barrels or liquefied gas already loaded at sea. For many, this has been seen as a clear win for Russia (and China), as it represents an economic benefit that will probably be invested in the war machine against Ukraine.
Modern warfare increasingly illustrates how asymmetric strategies can exploit that intention to create a strategic fatigue. Iran’s use of relatively inexpensive technologies such as drones demonstrates how low-cost systems can challenge far more expensive Western military infrastructures. What was likely not meant to become a prolonged war in Iran—the failure of regime change, still with a militarily weakened Iran—might, in conclusion, put an ultimate benefit for China and Russia to create strategic exhaustion on the West. The longer the conflict persists, the more likely it is that they will benefit from the war.
An uncertain endgame
What began as a forceful attempt to reshape the strategic landscape in Iran has gradually evolved into a more complex geopolitical crisis with no clear military resolution. The expectation of a quick strategic victory for the U.S. and Israel failed and was replaced by a scenario in which prolonged instability seems more plausible, similar to what is happening today in Ukraine, and risks the Middle East to a new humanitarian crisis.
In such an environment, the most sustainable path toward de-escalation is diplomacy. To build a successful negotiation between Iran, Israel, and the United States, it is essential to remember the most basic causes of the conflict: Iran’s nuclear program and missile capability. A renewed negotiation process should be inspired by the principles of the Joint Comprehensive Plan of Action (JCPOA), but strengthened to address Iran’s missile capabilities. This could provide a mechanism to prevent further escalation.
In an increasingly conflicted international system, diplomacy may not produce perfect solutions, but it could still prevent new regional disputes over matters that could otherwise be addressed through negotiation.
