China's Economic Interests Limit Support for Iran

China's support for Iran in the face of US military attacks and sanctions has economic limits, according to analysts. While China is opposing Washington's actions against Tehran, it is unlikely to move beyond its existing economic ties with Iran. This is because Beijing's wider interests, including ties with the US and Gulf states, limit its willingness to support Iran at any cost.

China is Iran's top trade partner, taking up to 90% of Iranian oil exports since the US and Israel launched their war in late February. However, Iranian crude represents only about 2% of China's overall energy mix. Major state-owned refiners like Sinopec and PetroChina have avoided Iranian oil for years, leaving purchases largely to independent 'teapot' refiners with limited links to the dollar-based financial system.

The Shanghai Cooperation Organisation gathering in Bishkek, Kyrgyzstan, saw a brief meeting between Iranian President Masoud Pezeshkian and Chinese President Xi Jinping. However, Chinese outlets did not mention it. Xi then travelled to Egypt, where he called for opposition to 'external interference' and repeated his support for a diplomatic resolution to the Iran war.

China's promised investment in Iran has also fallen short of rhetoric. Beijing pledged up to $400bn in investment over 25 years under a 2021 comprehensive strategic partnership agreement, but few projects have materialised. In 2023, then Iranian deputy economy minister Ali Fekri said investment since the agreement had totalled about $185m.