Will Iranian oil still fuel China? An analysis of Beijing's stance on international sanctions against Iran

Master Thesis

2013

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University of Cape Town

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Due to China's growing energy needs that stem from its unrelenting drive for economic development, Beijing stresses the importance of maintaining a continuous supply of energy, particularly oil, to maintain its impressive economic growth. However, seeing as China's domestic resources are unable to satisfy its projected future oil demands, the Chinese realise that, barring significant domestic oil discoveries, their dependency on oil imports, particularly from the Middle East, will continue to increase. Since the international oil scene is dominated by Western energy companies, China's fuel procurement strategy reflects a mercantilist approach to improving its position vis-a-vis established energy consuming nations. Beijing's mercantilist stance in securing energy resources is particularly demonstrated in its oil diplomacy, which makes use of various political and economic incentives that can only be employed by the state. China's energy-centric form of diplomacy has been inevitably extended to the globe's most hydrocarbon affluent regions. Of significant importance to the Chinese is the Middle East, particularly the Persian Gulf as it contains a large stake of the world's proven oil reserves. China has thus sought to improve its relations with Persian Gulf nations such as Iran. However, Iran's relentless pursuit to obtain nuclear capabilities has implicated China in Iranian-American tensions. Although China has sought to steer clear of becoming embroiled in the Iranian nuclear situation due to its improved standing in the Gulf, Beijing has unavoidably become a significant actor in the diplomatic brinkmanship over Iran's nuclear situation. The scenario surrounding Iran's nuclear ambitions essentially pits China's national interests of energy security against its desire to maintain favourable relations with the United States. In light of this, the following thesis - "by means of a literature survey" attempts to address how Beijing manages to maintain Iranian oil imports and uphold stable relations with Washington in the face of American-led international sanctions against Iran.
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