Why China is urgently looking to North Africa as the energy crisis rolls on

The war in Iran and ensuing closure of the Strait of Hormuz has exposed the risks of over-reliance on the Persian Gulf for oil, turning Beijing’s Mediterranean infrastructure plans from long-term goals into urgent strategic necessities. From Algerian oilfields to Moroccan battery factories and Egypt’s industrial base, China might now fast-track these projects to create a Mediterranean hub for a green-energy supply chain, observers said. Beijing aims to create a strategic backup that protects its economy from future energy disruptions. In Algeria, a major Belt and Road Initiative partner with one of Africa’s biggest Chinese expatriate communities, Chinese state-owned firms manage multibillion-dollar infrastructure and energy portfolios. These include a long-standing production-sharing partnership between Sonatrach and Sinopec, as well as the US$437 million naphtha processing unit at the Arzew refinery in the country’s northwest. Up the coast, the proposed US$4.7 billion El Hamdania megaport in Cherchell, originally developed by China State Construction Engineering and China Harbour, is meant to anchor Beijing’s maritime strategy in the Maghreb. In Morocco, Chinese companies are entering the electric vehicle battery sector, led by Gotion High-Tech’s US$6.5 billion Kenitra gigafactory. The investment leverages Morocco’s free-trade deals with the United States and European Union to bypass trade barriers and access Western subsidies. In Egypt, Beijing is investing US$500 million in a 5-GW solar cell factory and the region’s first battery storage plant within the TEDA-Suez zone. Located along the Suez Canal, this hub produces goods from fibreglass to wind turbine blades, serving African, European and Middle Eastern markets. According to Chuchu Zhang, an associate professor at the school of international relations and public affairs at Fudan University in Shanghai, North African nations offer China a strong combination of reliable access routes that largely bypass Hormuz risks as well as opportunities to co-develop low-carbon supply chains that serve both immediate energy security needs and longer-term decarbonisation goals. Zhang said Algeria had the potential to provide more near-term hydrocarbon buffering, Morocco anchored the green-hydrogen frontier and Egypt supplied scalable renewable infrastructure and logistical depth. “These partnerships are transforming North Africa into a new fulcrum for China’s energy security – one that blends traditional oil diplomacy with forward-looking clean-technology collaboration,” she wrote in a recent paper published by the Stimson Centre, a Washington-based think tank. The urgency is clear. China is the world’s largest crude oil importer and usually relies on the Gulf for nearly half of its seaborne supplies. Since the US-Israel war on Iran began on February 28, the Strait of Hormuz has been largely impassable. A fragile two-week ceasefire remains in place, but peace talks collapsed on Sunday over maritime security guarantees, and US President Donald Trump has moved to block the passage of vessels until regional stability is restored. John Calabrese, a non-resident senior fellow at the Middle East Institute, a Washington-based think tank, viewed China’s strategy in North Africa as “a deliberate diversification effort where each country serves a distinct purpose”. Calabrese saw Algeria as a short-term supply gap option for oil and shale gas, while Morocco was the long-term prize in new energy development, the latter tracking with Beijing’s latest five-year plan prioritising green energy. By contrast, Egypt’s “special role” was that of a logistics centre, he said, with Egypt and the Suez Canal offering China useful routing flexibility compared with the Hormuz chokepoint. “But Houthi attacks on Red Sea shipping show that no single route is trouble-free. Hence the need to diversify,” Calabrese added, referring to the political and military movement that now controls the capital of Yemen and is closely allied with Iran. Calabrese said the countries were all tied into the Belt and Road Initiative and were situated within easy reach of European markets. According to Andrea Ghiselli, lecturer in international politics at the University of Exeter, there would probably be renewed impetus in the China-centred trade and infrastructure scheme, especially for projects related to renewable energy. “We can expect a significant increase in demand for Chinese green technologies as many countries around the world, including those in North Africa, face an energy crisis,” Ghiselli added. At the same time, he said, the Algerian gas sector had long been attractive to Chinese companies, which could even “deepen their involvement as the country emerges as a critical supplier”. As for shipping, Ghiselli said the latest data from the Cosco-controlled port of Piraeus showed a decline in traffic, largely owing to instability in the Red Sea and the Middle East more broadly. Cosco vessels were among the few that managed to pass through the Strait of Hormuz of late before the ceasefire was reached, Ghiselli noted. In addition, Ghiselli said, China’s Unipec, a large energy-trading company, had begun to reorient its operations to load oil from Yanbu, a port city on the Red Sea coast of western Saudi Arabia. However, this could not “offset the closure of Hormuz, as some varieties of Saudi crude are not exported from that port”. “It is clear that this is not a favourable moment for Chinese shipping companies operating in the region,” Ghiselli added. Kai Xue, a Beijing-based corporate lawyer who advises on foreign direct investment and cross-border financing, argued that oil and gas from Algeria and Libya, where China recently reopened its embassy in Tripoli, could not fully substitute for the massive volumes lost if the Strait of Hormuz remained closed. Yet, these North African resources still held indirect strategic value for China’s energy security, he said. By boosting Europe’s energy security and increasing overall global supply, higher North African output helped lower global prices, which ultimately would ease the financial burden on Chinese energy procurement, Xue said. “In Algeria, Chinese companies could potentially have a big role in gas production,” he added. “Sinopec and Sonatrach have long-standing ties.”

Why China is urgently looking to North Africa as the energy crisis rolls on

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}From Algerian oilfields to Moroccan battery factories and Egypt’s industrial base, Beijing may now fast-track projects across the region

From Algerian oilfields to Moroccan battery factories and Egypt’s industrial base, Beijing may now fast-track projects across the region