China calls on all sides to safeguard ships in Strait of Hormuz

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BEIJING – China called on “all sides” of the Iran war to ensure the safe passage of ships through the Strait of Hormuz, a key maritime chokepoint.

“China urges all parties to immediately cease military operations, avoid escalating tensions and safeguard the safety of navigation in the Strait of Hormuz,” China Foreign Ministry spokeswoman Mao Ning said on March 3 at a regular press briefing in Beijing.

Tanker traffic through the critical artery has effectively halted since the US and Israel began a bombing campaign over the weekend that has prompted Iran to respond with missile strikes across the region.

Senior gas executives say China is pressuring Iranian officials to avoid action that would disrupt Qatari gas exports or other energy shipments making their way through the Strait of Hormuz.

As the buyer of the vast majority of the Islamic Republic’s oil, China provides a vital economic lifeline for Iran.

But the world’s largest energy importer depends more heavily on the wider Persian Gulf region for both oil and gas supplies, and cargoes of both require transit through the narrow waterway. 

Qatar, which accounts for a fifth of global liquefied natural gas, is a particular concern.

After an Iranian drone attack on March 2, Qatar halted production at Ras Laffan, the world’s largest LNG export facility – the first complete halt in nearly three decades of operation. 

China’s energy importers have been told that Beijing is trying to ensure vessels continue to move through Hormuz, according to executives at the state-owned firms who have been briefed by government officials.

Government officials are pressing senior Iranian counterparts to ensure Tehran does not attack oil and LNG tankers traversing the Strait, and instead allows supplies to flow, according to several of the company executives, who asked not to be named as the conversations were not public.

The executives said Iranian officials had also been asked to avoid striking exporting hubs like Qatar, which alone supplies 30 per cent of China’s LNG, a significant portion of the total even accounting for output arriving by pipeline and from other sources.

China has so far made only limited public statements on Iran, with Foreign Minister Wang Yi telling his counterpart Abbas Araghchi on March 3 that while Beijing supported efforts to safeguard national security, Tehran should pay attention to the “reasonable concerns” of its neighbours, according to a statement from the Foreign Ministry. 

The readout did not mention energy supplies.

The Foreign Ministry has not responded to a written question on the country’s position.

At a regular briefing, a Chinese Foreign Ministry spokesperson said the country was “deeply concerned” over the conflict’s spread.

Chinese smelters continue to churn out record quantities of copper, swelling stockpiles and threatening to slow the metal’s powerful gains.

The impact on China’s economy from the war on Iran looks manageable at this point, with a potential mild boost to inflation from a rise in oil prices, said Bloomberg Economics.

Geopolitically, the damage may be larger and more lasting.  

China’s five-year plan will help dictate how fast the top polluter can cut greenhouse gas emissions and the extent of new support for clean technology, policy settings that are critical to determining the world’s success in tackling climate change.

For decades, China’s leader have largely ignored calls to rebalance the economy toward consumption as they pursued an investment-heavy, export-oriented growth strategy. BLOOMBERG