The President of China, Xi Jinping, will discuss China's energy stance towards Iran during his meeting with U.S. President Donald Trump. This meeting, taking place on Wednesday in Washington, occurs at a time when global wars and tensions have worked in favor of China as an emerging energy power.
China's Energy Power in the Global Market
The war in Iran has led to a rise in global energy and commodity prices, putting political pressure on Trump and the Republican Party. The price of a barrel of oil has reached around $100 globally. Meanwhile, China has positioned itself as a stable geopolitical partner by exporting clean energy technologies to vulnerable countries. Erica Downs, a former energy analyst at the CIA, stated that China has performed well in this crisis and it seems Xi is not under particular pressure to respond to U.S. demands.
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Challenges Facing Trump and Energy Plans
The Trump administration will emphasize in this meeting that continued cooperation with Iran and its regime is unacceptable and will have consequences. However, analysts and energy executives expect no specific practical outcome from this meeting. According to Philip Lock, an international analyst, many White House officials are focused on the war, and adequate planning for this meeting has not been done.
This meeting comes at a time when Trump has restricted two main sources of cheap oil for China. China is recognized as the main buyer of crude oil from Iran and Venezuela, and Trump has claimed that the United States can access these resources through military actions. In this context, Trump told global leaders at the United Nations that the United States now has a primary claim on Venezuelan oil.
The Trump administration hopes to distance China from its dependence on Russia by increasing the costs of oil purchases for China and bringing it back to the U.S. market. However, due to tariffs imposed by Trump on Chinese goods, China has halted its natural gas purchases from the United States. Additionally, while crude oil purchases from the U.S. have decreased, purchases of fuel from American refineries have increased in recent months.
China's Role in Global Energy Security
Despite being the world's largest oil importer, China has used its purchasing power to create large oil reserves and become a key supplier of petroleum products in the region. In recent months, Beijing has shown that its presence or absence in oil markets can significantly impact energy consumers globally. China is also enhancing its role in the global energy economy by providing a new type of energy security to vulnerable countries dependent on Middle Eastern oil and gas.
China's exports of solar panels and electric vehicles are on the rise, contributing to its role as an energy superpower. Downs noted that there is a perception in China that energy security is shifting towards controlling technology rather than controlling physical resources. As China leads in the production of many clean technologies, this position allows it not only to secure its energy but also to sell its technologies to other countries.
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