China Brokers Surprise Diplomatic Push Between Israel and Iran, Shifting Middle East Power Dynamics

Beijing Walks a Diplomatic Tightrope as Israel-Iran War Enters Its Second Week China’s foreign policy machinery is working overtime after a surprise escalation between Israel and Iran dragged the wider Middle East into open conflict on 12 June. While fighter-jet exchanges and missile barrages continue—Tel Aviv struck Natanz again overnight, and Iran answered with drones near Haifa—Beijing has tried to project calm, calling for an “immediate cease-fire” and offering to host talks in Shanghai. Yet behind the public neutrality, Chinese ministries are signaling unmistakable sympathy for Tehran, underscoring how China’s energy security and multibillion-dollar Belt and Road investments shape its stance on the Israel-Iran war. The calculus is straightforward: Iran supplies roughly 10 percent of China’s crude imports under the 25-year Comprehensive Strategic Partnership, a $400 billion deal that guarantees discounted oil for Beijing and infrastructure financing for Tehran. Disruption at the Strait of Hormuz or further sanctions could inflate prices just as China’s post-pandemic recovery shows signs of fatigue. That risk explains why President Xi Jinping instructed Special Envoy Zhai Jun to “actively promote dialogue” while the Foreign Ministry blasted Israel’s strikes as “irresponsible escalation” at Monday’s press briefing. Israel, for its part, views China’s lean toward Iran with growing suspicion. Jerusalem has long courted Chinese tech investment—Haifa’s new deep-water port was built by Shanghai International—but the current crisis revives fears that sensitive data could reach Iranian hands. Israeli officials privately complain that Beijing vetoes strong U.N. statements condemning Iran’s ballistic-missile tests, yet remains silent when Hezbollah rockets rain on northern Israel. Analysts note that China’s public messaging has all but adopted Iran’s framing of Israel as the aggressor, a shift from the balanced tone Beijing used during the 2023 Gaza war. Economic shockwaves are already visible. Brent crude pushed past $103 per barrel on Friday, its highest level since 2022, after traders priced in the possibility of Israeli strikes on Iranian export terminals at Kharg Island. Chinese refiners such as Sinopec and CNPC reportedly activated force-majeure clauses on July shipment contracts, while Shanghai’s composite index fell 2.4 percent on fears of cost-push inflation. The fallout threatens to derail Beijing’s 5 percent GDP growth target, forcing policymakers to weigh a rare release from the country’s strategic petroleum reserves. Regional actors are pressuring China to do more than issue statements. Saudi Arabia—now China’s largest oil supplier—requested that Beijing leverage its influence to keep Iran’s navy from mining the Strait of Hormuz, according to Gulf diplomats. Turkey and Qatar, both key nodes in China’s westward logistic corridors, likewise want a rapid cease-fire to protect trade routes. But persuading Iran to curtail hostilities may be difficult: Supreme Leader Ayatollah Khamenei on Thursday called the war a “divine test” and vowed to continue until “Zionist aggression is punished,” rejecting European mediation efforts. U.S. officials are watching closely. The Pentagon said a carrier strike group is repositioning in the eastern Mediterranean “to protect maritime commerce,” while Secretary of State Antony Blinken urged Beijing to refrain from “material support” that could extend the conflict. Washington fears that China could supply Iran with satellite imagery or dual-use components, repeating patterns seen in the Russia-Ukraine theater. For now, China denies any arms transfers, yet the optics of alignment with Tehran complicate what was already a brittle U.S.–China relationship. What happens next hinges on whether Beijing can translate its economic leverage into diplomatic clout. Should China succeed in brokering even a limited cease-fire—perhaps an oil-for-calm arrangement that keeps tankers sailing—it would cement its role as a power broker in a region traditionally dominated by Washington. Failure, however, risks entrenching a perception of Chinese partisanship that could alienate Israel, fuel anti-Chinese sentiment in the West, and expose Beijing’s own projects to the shrapnel of a widening Middle East war.