Strait of Hormuz is Turbulent, China's Energy Balance in the Spotlight

JAKARTA - Tensions in the Strait of Hormuz have made the world look again at energy resilience. In the midst of the risk of fuel prices and supply routes, China's energy mix is considered to provide benefits for the resilience of its economy.

China Daily, quoted on Friday, June 26, reported that the assessment was made by Rosneft CEO Igor Sechin. He said China's systematic approach to energy development and infrastructure investment made the country more prepared to face global turmoil.

Energy mix is a combination of various energy sources, such as coal, gas, solar, wind, nuclear, and energy storage, which are used to meet electricity and fuel needs.

According to Sechin, energy is no longer just a matter of resources, technology, and markets. Geopolitical conflicts, trade route disruptions, electricity demand surges, and technological competition make energy security an important part of a country's resilience.

He highlighted the Strait of Hormuz as the clearest example. This route is one of the world's vital supply routes for oil and liquefied natural gas.

Based on data from the United States Energy Information Agency or EIA, around 20 million barrels of crude oil and oil products cross the Strait of Hormuz every day in 2025. The value of energy trade through the line is estimated to be close to 600 billion US dollars per year.

However, the security of the line deteriorated after the US and Israeli military attacks on Iran. The increase in fuel prices also contributed to operational costs in various sectors.

Maersk CEO Vincent Clerc warned that the cost increase would eventually be passed on to customers and consumers.

In such a situation, Sechin believes China's experience is relevant. He said China has developed into a world energy power thanks to economic, scientific, and technological advances.

According to Sechin, China's balanced approach makes the country more prepared for the crisis in the Strait of Hormuz and rising fuel prices.

China, said Sechin, has built inexpensive urban and intercity transport. When supply lines are disrupted, the public still has options such as electric cars, electric buses, gas-fueled trucks, subways, electric trains, and electric taxis.

Citing Sechin's report, China Daily wrote that resilience was born from China's way of viewing energy as a long-term job directly related to economic security.

In the past 10 years, electricity production from solar and wind in China has increased tenfold to around 2,300 terawatt-hours. This figure is equivalent to 22 percent of the national energy mix.

China is also continuing to build thermal power plants to maintain supplies. Over the past year, 78 gigawatt coal-fired plants have started operations.

In the nuclear sector, China is running the world's largest construction program. Currently, 39 reactors are under construction, more than half of the total nuclear plants being built globally.

Energy storage is also an important part of the large system. According to Sechin, China is now leading the world in this sector. China is also a major investor in the electricity grid, with a value of around 100 billion US dollars.

Sechin believes that a diverse energy strategy provides real benefits to electricity prices. Industrial electricity tariffs in China are around 9 cents per kilowatt-hour, or 72 percent lower than Germany and 59 percent lower than France.

The tariff for household electricity in China is around 7 cents per kilowatt-hour. The figure is said to be 58 percent lower than in the United States.

"Only Russia is at a similar level," Sechin said.

According to Sechin, strengthening energy resilience is part of China's strategy in utilizing domestic resources. Large energy and infrastructure investments make that vision turn into economic gains.