China has been identified as the clear winner in Asia from the ongoing crisis in the Middle East, particularly following the virtual closure of the Strait of Hormuz. A report published on Tuesday by The Asia Group think tank concluded that Beijing successfully navigated the global commodities turmoil triggered by the disruption to the vital waterway, and is now poised to benefit from the broader economic and geopolitical shifts.
The crisis escalated after joint strikes by the US and Israel on 28 February, targeting Iranian government and military sites, which resulted in the death of Iran's supreme leader, Ali Khamenei. This led to Iran effectively closing the Strait of Hormuz, a crucial choke point for a significant portion of the world's oil and gas shipments. The ensuing disruption caused global energy prices to surge, with Asian markets, heavily reliant on these supplies, being particularly vulnerable.
Before the Strait's closure, approximately 80% of the oil and nearly 90% of the liquefied natural gas (LNG) transiting the waterway were destined for Asian economies. The Asia Group's research examined the economic and political fallout across major Asian economies, including China, India, Japan, and South Korea, as well as emerging markets in Southeast Asia, scrutinising impacts on key sectors such as manufacturing, energy, and agriculture.
The report highlighted China's strategic advantages, attributing its resilience to extensive oil stockpiles and an ambitious renewable energy programme. Unlike many regional peers, China's substantial energy reserves, which included increased crude imports in 2025 largely diverted to stockpiles, provided a buffer against the initial energy shock. By January, China reportedly held enough reserves to cover 104 days of imports at 2025 levels. Furthermore, its aggressive investment in renewable energy infrastructure, including installing 315GW of new solar capacity last year, has rapidly diversified its energy mix, reducing reliance on fossil fuels.
Beyond its internal resilience, China is also benefiting from the global response to the crisis. As other nations accelerate their transition to clean energy, Beijing's dominant position in the global supply chain for solar and other clean technologies is further solidified. The report noted a significant surge in China's electric vehicle exports and solar shipments, indicating a growing demand for its green technology products. This has allowed Beijing to frame the United States as a destabilising force in the Middle East, an entanglement that imposes costs on the global economy.
While China appears to be gaining in certain areas, the report also acknowledged potential risks. Instability in the Middle East could still pose challenges for Beijing, which, despite perceived benefits from a diminished US presence, does not necessarily seek to replace Washington as a regional hegemon or security provider.