China calls for end to Gulf conflict, offers to ease South-east Asia energy crunch

BEIJING – China called for an end to conflict in the Gulf and said the safety of waterways should not be disturbed on March 19, adding that it was ready to work with South-east Asia to address energy shortages as oil markets reel from supply shocks.

While the US-Israeli war on Iran has allowed China to cast itself as the more reliable superpower, analysts say it is wary of global energy market uncertainty, not least because it needs the resources it has been stockpiling since the late 2000s to power the manufacturing sector underpinning its economy.

China’s show of willingness to work with the region of more than 700 million people would be welcome relief to South-east Asian oil importers after an order by Beijing earlier in March to ban Chinese exports of diesel, gasoline and jet fuel.

China is also curbing exports of fertilisers, which rely on oil and gas refining byproducts, to protect its domestic market.

The ban would worsen shortages and further hike prices for some of China's strategic partner-nations in South-east Asia, which have already been reeling from supply cuts brought on by the US-Israeli war against Iran.

“The situation in the Middle East has disrupted global energy security,” said Chinese foreign ministry spokesperson Lin Jian at a regular news conference when asked if South-east Asian nations had reached out to China for help.

“The countries involved should immediately cease military operations to prevent regional instability from having a greater impact on global economic development,” said Mr Lin.

“China is willing to strengthen coordination and cooperation with South-east Asian countries to jointly address energy security issues,” Mr Lin added.

Any easing of Beijing’s ban could help soothe fuel jitters in countries from the Philippines to Cambodia.

Opportunity

The crisis could create new openings in countries where China had struggled to gain a foothold, said Mr Wang Jin, senior fellow at the Beijing Club for International Dialogue, a think tank under the purview of China’s foreign ministry.

The Strait of Hormuz’s closure also highlights the relative reliability of renewable energy, compared with reliance on Gulf fossil fuels, including nuclear power and other green energy sectors in which Beijing is a world leader, he said.

“China hopes to develop very positive, healthy, and very consistent relations – particularly energy relations – with everybody,” he added.

Philippine Energy Secretary Sharon Garin met the Chinese ambassador to the Philippines on March 17 to discuss cooperation in energy, a departure from the two countries’ arguing over maritime rights in the South China Sea. REUTERS