China pledges stronger energy security as Iran war hits economies

Tuesday 28 April 2026 - 13:57

By: Dakir Madiha

China pledges stronger energy security as Iran war hits economies

China’s Politburo has pledged to strengthen national energy security as the economic fallout from the war involving Iran spreads across global markets. The commitment comes as countries from the Gulf region to Europe face rising inflation, slowing growth, and severe disruptions in energy supply chains linked to the continued closure of the Strait of Hormuz.

The Gulf economies are confronting what analysts describe as their most severe downturn since the COVID-19 pandemic. Economists have sharply downgraded growth forecasts for 2026 across the Gulf Cooperation Council. Qatar is now expected to contract by 6 percent, Kuwait by 4.4 percent, and Bahrain by 2.9 percent. Regional forecasts indicate overall Gulf economic growth could turn negative as oil and gas flows remain constrained.

The disruption has removed an estimated 400 million barrels from global supply and pushed energy prices sharply higher. Some projections suggest Qatar could suffer the deepest contraction in the region, with GDP potentially declining by as much as 13 percent next year. Analysts also warn that aviation and tourism sectors across the Gulf are facing near collapse due to fuel shortages and travel disruptions.

Asian economies are also revising expectations downward. Thailand’s central bank cut its 2026 growth forecast to 1.3 percent from 1.9 percent, citing prolonged instability in Middle Eastern energy infrastructure. Thai officials warned that restoring normal oil and gas supplies could take up to two years if the conflict continues damaging production and transport systems.

Against this backdrop, China’s Politburo stated that the country must respond systematically to external shocks and improve safeguards for energy resources. The announcement reflects broader concerns over weakening trade momentum. Chinese export growth slowed sharply to 2.5 percent year over year in March, down from 21.8 percent during the first two months of the year. The resulting trade surplus reached its lowest non holiday monthly level in four years.

Egypt is facing mounting economic strain from multiple directions. The government increased fuel prices in March by between 14 and 17 percent depending on fuel type. Revenue from the Suez Canal declined by 38 percent during the first quarter of 2026 compared with a year earlier, while economists estimate that billions of dollars in short term capital have left the country since the conflict began. Concerns are also growing over weaker tourism income and remittances.

Europe is beginning to feel stronger economic pressure as well. German Chancellor Friedrich Merz warned that the conflict is imposing substantial costs on Germany’s economy and cautioned about the long term consequences of prolonged military escalation. Rising energy prices and supply disruptions are adding pressure to industrial production and growth across the continent.

The widening economic impact of the conflict is forcing governments to reassess energy strategies, fiscal policies, and supply chain resilience. As uncertainty persists, policymakers across major economies are preparing for a prolonged period of volatility tied to energy security and geopolitical instability.