China is under scrutiny for its response to rising energy costs impacting nations participating in its Belt and Road Initiative (BRI), particularly those affected by the ongoing Iran conflict. Reports indicate Beijing is prioritizing its own energy security and domestic market stability, offering minimal assistance to its BRI partners.

Growing Concerns Over BRI Reliability

Clients of the massive Belt and Road Initiative are requesting support from China to navigate the escalating energy prices. However, China has largely chosen to curtail fuel exports to bolster its own gasoline stockpiles and protect its economy. This perceived lack of support raises questions about the reliability of the ambitious initiative.

Broken Promises and Contractual Obligations

China had previously made significant promises of energy and economic security to nations joining the BRI, some of which were formalized in binding contracts. Despite these assurances, countries like Bangladesh and Thailand are experiencing difficulties securing promised fuel and fertilizer shipments.

Export Restrictions and Limited Shipments

China began restricting fuel exports, particularly refined fuel, in mid-March to increase its domestic reserves. Despite pressure from distressed BRI clients, China anticipates shipping only between 150,000 and 300,000 metric tons of fuel in April – a fraction of originally projected deliveries.

Chinese officials have remained largely silent on the export ban, offering only vague assurances of future availability to regular Southeast Asian customers. Recent reports detail the arrival of Chinese tankers in the Philippines and Vietnam, but it’s unclear if these shipments were contracted before the restrictions were implemented.

Fertilizer Shortages Add to the Crisis

Concerns also extend to fertilizer shipments, with Malaysia and the Philippines facing potential delays. China, a leading fertilizer producer, had already begun adjusting export levels to maintain stable domestic prices even before the Iran conflict disrupted shipping routes through the Strait of Hormuz.

Analysis: Domestic Priorities Prevail

Matthew Biggin, a senior commodities analyst at BMI, explained, “This pattern is consistent: China restricts supplies rather than coming to the rescue during global tightness. The export restrictions exist because of their tight domestic balance — they’re prioritizing food security and insulating their domestic market from price shocks.”

China has accumulated substantial fuel reserves and is unwilling to deplete them, despite the hardships faced by its BRI partners. While China continues to receive oil shipments from Iran, its reserves allow it to maintain manageable retail gas prices. Other Southeast Asian nations have been forced to implement energy conservation measures, leading to productivity declines and even labor unrest in countries like Sri Lanka and the Philippines.

Implications for the Belt and Road Initiative

This reluctance to assist its BRI partners highlights the potential limitations of Beijing’s global infrastructure project. The current crisis reveals a prioritization of domestic interests over the needs of international clients, potentially eroding trust and discouraging future participation. The incident raises questions about China’s commitment to its pledges and the overall sustainability of the BRI.

The situation underscores the vulnerability of countries reliant on a single source for essential goods. The energy crisis has far-reaching economic, political, and social consequences, emphasizing the need for energy diversification and strategic partnerships.