China’s Iran balancing act grows more costly

US President Donald Trump said during his recent visit to Beijing that Chinese President Xi Jinping stressed the importance of keeping the Strait of Hormuz open.

China’s foreign ministry has also repeatedly called for the Strait of Hormuz to reopen “as soon as possible” and urged a “comprehensive and lasting ceasefire” between Iran and the United States.

Before the closure of the Strait of Hormuz, roughly 45 percent of China’s oil imports passed through the strategic waterway.

As Brent crude futures surged to $117 per barrel and physical oil cargoes traded at prices as high as $150, China responded by cutting oil imports by 20 percent last month and raising domestic gasoline and diesel prices on May 9.

Reuters reported that China’s producer prices climbed to a 45-month high in April, while consumer inflation also accelerated.

But the damage to China’s economy goes far beyond energy supplies.

Although Beijing has yet to release customs data for April, March figures already point to a sharp collapse in Chinese exports to the region.

According to Chinese customs statistics, exports to Persian Gulf countries fell to just $5.7 billion during March—the first month of Iran’s blockade of the Strait of Hormuz—down from $13.2 billion the previous month.

In other words, Chinese exports to the Persian Gulf region plunged by 57 percent within a single month.

These figures represent only part of the economic fallout facing China. Chinese companies implemented or invested in approximately $39.4 billion worth of projects across the Middle East last year.

But with the region sliding deeper into conflict and Iran launching extensive attacks against its Arab neighbours, many of Beijing’s regional investments are facing growing uncertainty.

Expectations among those states that China should pressure Tehran should not be underestimated. China exported roughly $340 billion worth of goods to Iran’s Arab neighbours. That’s roughly equivalent to the entire size of Iran’s economy.

Beijing cannot simply ignore the concerns of its wealthy regional partners.

One potential lever available to China may be reducing purchases of Iranian crude. Data from Kpler shows that despite strong demand, China cut imports of Iranian oil by nearly one-third in April compared to March, reducing purchases to 1.16 million barrels per day.

China also remains Iran’s largest non-oil trading partner.

Beijing has nevertheless continued to back Tehran diplomatically. China and Russia opposed recent US-backed UN resolutions on the Strait of Hormuz, arguing the measures were one-sided and risked fueling further escalation.

China’s UN envoy Fu Gong said the proposed resolution was “not helpful” and argued that both its timing and content were wrong.

Still, Iran continues to serve as an important strategic card for Beijing in its broader rivalry with the West. But despite the growing economic costs, China is unlikely to support any outcome that would leave Tehran strategically defeated by Washington.

President Trump’s visit to Beijing appears to have confirmed two things about China’s approach to the Iran crisis: it is willing to help prevent further escalation, but not at Tehran’s expense.

Reports during and after the summit, including comments highlighted by Fox News, suggested China had signaled readiness to play a more active role in stabilizing the situation around Iran and the Strait of Hormuz.

But any Chinese cooperation is likely to remain limited, transactional and tied to Beijing’s broader strategic priorities.

Read the full article here.

Reports during and after the summit, including comments highlighted by Fox News, suggested China had signaled readiness to play a more active role in stabilizing the situation around Iran and the Strait of Hormuz. But any Chinese cooperation is likely to remain limited, transactional and tied to Beijing’s broader strategic priorities.

Before Trump’s departure from Washington, Treasury Secretary Scott Bessent accused China of “funding the largest state sponsor of terrorism,” while Trump himself said he was going to have “a long talk” with Xi. Earlier, the Treasury Department sanctioned five of the so-called “teapot” refineries that process Iranian oil in China.

These moves were not surprising. The war involving the United States, Israel and Iran has shaken the Middle East, threatened global energy flows and become increasingly unpopular among American voters and consumers. Iran has become a priority issue for the White House.

China has reasons to listen. Beijing has already shown some willingness to restrain Tehran, including by nudging Iran toward the Islamabad talks. It does not want the fragile ceasefire to collapse. It does not want the Strait of Hormuz closed. Nor does it want a global downturn that would damage Chinese exports.

China’s investments in electrification and renewable energy have increased its resilience, but they have not made it immune to a major shock in the Middle East. Yet Xi’s help, if it comes, will not be free.

In his recent conversation with Secretary of State Marco Rubio, Foreign Minister Wang Yi made clear that Taiwan remains the core issue for China and the greatest risk in US-China relations. Chinese readouts of the Trump-Xi meeting also placed Taiwan at the center of discussions, with the “situation in the Middle East” appearing much lower on the agenda.

The implication is difficult to miss: if Washington wants Chinese cooperation, Beijing will expect a more accommodating US position on Taiwan. Several current and former American officials have expressed concern that Trump, who said he intended to have “that discussion” with Xi, could delay or reduce the $14 billion weapons package for Taiwan approved by Congress in January.

In other words, China has strong reasons to support de-escalation over Iran, but Beijing also appears to view the crisis through the lens of a much larger strategic bargain with Washington.

Xi’s help is also likely to remain limited. Beijing and Tehran still share a fundamental objective. Both want the Iranian regime to survive. Both want Iran to avoid emerging from the conflict as a defeated and humiliated loser. Both oppose a regional order shaped by the United States and Israel.

For Tehran, defeat would be a regime-threatening disaster. For Beijing, it would be another demonstration that American coercive power can still break an anti-US partner.

China may therefore encourage Tehran to negotiate, support language about regional stability or help Trump claim diplomatic progress. It may even make quiet tactical adjustments to its economic dealings with Iran. But any such move will be carefully calibrated to serve China’s own interests.

China may help stabilize the situation; it will not help Washington defeat Tehran.

The fact that the Chinese embassy in Washington has not denied reports that Wang Yi and Rubio agreed in April that the Strait of Hormuz must remain toll-free is a good example of this dynamic. So too is the American readout stating that China opposes Iran developing nuclear weapons. Both signal goodwill, but neither represents a meaningful shift in Beijing’s position or a compromise of its interests.

This means Trump may have secured Chinese support for de-escalation. He may even have persuaded Xi that a prolonged conflict is too costly for China and that Beijing has an interest in pushing Tehran toward compromise. But he cannot force China to choose Washington over Tehran. Pressure alone is unlikely to work, especially if it requires Xi to appear publicly subordinate to American demands.

There is another problem: it remains unclear what Washington actually wants. It is not enough to accuse China of enabling Iran. The United States still lacks a clearly defined objective. Does it want a ceasefire, renewed nuclear talks, limits on Iranian regional activity, security guarantees for regional partners or some combination of these?

Without a coherent strategy, China will continue using the crisis to extract concessions elsewhere while offering only limited help.

The summit may not have determined the future of the Middle East. But it did reveal something important about the emerging great-power rivalry. The United States remains militarily dominant but strategically erratic. China is economically central but cautious as a security actor.

Trump arrived in Beijing seeking Chinese help on Iran. Xi may offer some. But the price will be high, and the help will not come at Tehran’s expense.

The relationship between the Taliban and Iran, once marked by military confrontation and nearly pushed to war, is now defined by caution and quiet engagement.

The Taliban, who present themselves as representatives of a hardline Sunni Islamist movement, and the Iranian system, one of the main centers of Shiite political power, now maintain relations in which practical politics and mutual necessity have largely replaced deep-rooted sectarian hostility.

In the past two decades, the regional landscape has changed, enemies have shifted and one principle has again proven true: in the Middle East and across Central and South Asia, religion is often expressed rhetorically while decisions are driven by political interests.

Read full article here.

The Taliban, who present themselves as representatives of a hardline Sunni Islamist movement, and the Iranian system, one of the main centers of Shiite political power, now maintain relations in which practical politics and mutual necessity have largely replaced deep-rooted sectarian hostility.

At first glance, the relationship appears contradictory. The 1998 Mazar-e-Sharif incident, when Iranian diplomats were killed and both sides nearly went to war, remains firmly embedded in the memory of both regimes.

Yet more than two decades later, the regional landscape has changed, enemies have shifted and one principle has again proven true: in the Middle East and across Central and South Asia, religion is often expressed rhetorically while decisions are driven by political interests.

From opposition to engagement

When the Taliban returned to power in 2021, Iran was among the few countries that did not completely shut its doors. Tehran neither formally recognized the Taliban administration nor severed ties with it.

Iran understood that an Afghanistan facing economic collapse, international isolation and political uncertainty contained both risks and opportunities—and chose engagement over exclusion.

The Taliban, constrained by sanctions, frozen assets and diplomatic isolation, were in turn forced to rely on neighboring countries. Iran—with its long shared border, fuel, electricity, transit routes and regional influence—became a practical partner.

After the death of Mullah Omar, the Taliban’s second leader, Mullah Akhtar Mohammad Mansour, emerged as a central bridge to Iran. His close associates, including Ibrahim Sadr, Mullah Shirin and Mullah Talib, established Sunni religious schools in Iran’s Sistan-Baluchistan region.

Over the past two decades, Iran pursued what Afghan officials describe as a “multi-track policy,” maintaining ties with Afghanistan’s republican government while simultaneously expanding covert and overt contacts with the Taliban to preserve influence under any future political arrangement.

Former senior Afghan presidential adviser Mohammad Iqbal Azizi says Iran significantly deepened ties with the Taliban after 2004, largely because of shared opposition to the US military presence.

“That’s why Mullah Mansour, Ibrahim Sadr and others went to Iran and received support from there,” he said.

Former head of Afghanistan’s Presidential Administrative Office Fazl Mahmood Fazli told Afghanistan International that some tribes maintain longstanding links with Iran.

“In recent years, Ishaqzai, Noorzai and Alizai Taliban commanders even cooperated with the IRGC in smuggling operations, and these relations have become so strong that they have now taken on a new form of partnership,” he said.

Former Pakistani senator Afrasiab Khattak said Iran has long maintained relations across Afghanistan’s political spectrum.

“Afghanistan is important for Iran, and its relations with Afghan governments are based on pragmatic politics,” he said. “Iran simply cannot operate on a purely religious basis.”

Khattak added that Iran invested heavily in ties with the Taliban during the war years and that its influence over some Taliban figures remains visible.

A key factor driving closer ties has been the Taliban’s deteriorating relationship with Pakistan. Relations with Iran help the Taliban avoid isolation, while Tehran understands the leverage this dependency creates.

Shared threats, shared interests

A central factor in improving Taliban-Iran relations has been the logic of shared threats.

The US military presence in Afghanistan represented a mutual challenge for both sides and laid the groundwork for gradual rapprochement. Iran sought to limit US influence while the Taliban fought directly against it.

Iran also faced broader security concerns linked to Afghanistan: border stability, ISIS-Khorasan, Baloch militancy, drug trafficking and refugee flows. From Tehran’s perspective, many of these issues could only be managed through engagement with the Taliban.

Economic factors also play a major role. Sanctions and isolation have pushed the Taliban toward regional economic networks, with Iran becoming an important supplier of fuel, electricity and goods. Tehran meanwhile seeks access to Afghanistan’s market, transit routes and water resources.

Relations between Kabul and Tehran appear to have grown closer following recent US and Israeli strikes on Iran. Facing pressure from Washington, Israel and parts of the Arab world, Tehran appears increasingly unwilling to lose Taliban cooperation.

A founding member of the Taliban movement, speaking anonymously to Afghanistan International-Pashto, said Mullah Akhtar Mansour opposed basing ties with Iran on sectarian identity.

“I remember in 2000 when Mullah Akhtar Mansour came to Pakistan and we met in Quetta,” he recalled. “Mansour carried a message from Mullah Mohammad Omar saying relations with Iran should be built on interests—not religious differences.”

He added that Iran supported Taliban forces in Helmand, Herat, Kandahar, Zabul, Ghazni, Maidan Wardak and Farah during the insurgency.

Former Afghan acting defense minister Shah Mahmood Miakhel said shared fears over ISIS-Khorasan have also created room for cooperation.

“The Taliban have learned from their first rule that conflict with Iran costs them dearly,” he said. “And Iran now feels more reassured because of the Taliban’s deteriorating relations with Pakistan.”

Iran and Afghanistan share nearly 900 kilometers of border, while refugee flows, narcotics trafficking, smuggling and water disputes remain impossible to manage without sustained engagement.

Abdul Ghafoor Liwal, the last ambassador of Afghanistan’s former republican government to Iran, said Tehran openly acknowledged its pragmatic reasoning.

“Iran officially told me that the Taliban are enemies of the United States, and so are we,” he said. “And because Iran shares a long border with Afghanistan, it is compelled to maintain relations with the Taliban.”

A Taliban Foreign Ministry official, also speaking anonymously, said the relationship is driven heavily by economics.

“Afghanistan is a good market for Iran, and Iran is a good source of goods for us,” he said.

Pragmatism without trust

Despite growing cooperation, the relationship remains constrained by deep ideological and geopolitical divides.

Iran’s Shiite Islamic Republic derives legitimacy from the doctrine of Velayat-e Faqih, while the Taliban adhere to a hardline Sunni Deobandi interpretation of Islam. The two sides do not view each other as natural allies so much as necessary and manageable rivals.

Regional rivalries further complicate the picture. Just as India-Pakistan competition shapes Afghanistan, so too does the rivalry between Iran and Arab states.

Although the Taliban have avoided directly condemning Iranian attacks on Arab countries, they have at times described regional escalation as destabilizing. Taliban officials also seek stronger relations with Saudi Arabia, Qatar and the UAE, making outright alignment with Tehran difficult.

The Taliban continue seeking better relations with the United States and Europe, particularly in hopes of easing diplomatic isolation and refugee pressures.

Domestically and bilaterally, disputes over Afghan refugees and Helmand River water rights remain persistent sources of tension.

The Taliban also hope Iran will eventually recognize their government formally. Tehran, however, appears determined to keep recognition as leverage.

For now, necessity binds Tehran and the Taliban more tightly than ideology divides them. But the relationship rests less on trust than on a volatile region in which both sides fear isolation more than each other.