Chinese president arrives in US with new energy leverage as war rattles global markets

President Donald Trump plans to press Chinese President Xi Jinping on his energy posture with Iran when the leaders meet Wednesday in Washington. But there’s little reason for China to yield — especially since the war has helped strengthen its hand as an emerging global energy superpower.

The war in Iran has spiked global prices for energy and other commodities and created a political albatross around the neck of both Trump and his party. The price of a global barrel of oil stood at about $100 on Tuesday. Meanwhile, China has been exporting its clean energy technologies to other vulnerable countries, leveraging its massive oil stockpiles and presenting itself as a more stable geopolitical partner.

“China absolutely has been a big winner,” said Erica Downs, a former CIA energy analyst who is now a senior research scholar at the Center on Global Energy Policy at Columbia University. “China has managed the crisis relatively well. I don’t think Xi is going to feel any pressure, whatsoever, to respond to any U.S. pleas.”

Trump and his administration will stress during Xi’s visit that “continuing to do business with Iran and the regime is unacceptable, and there will be consequences for it,” a senior White House official said.

But energy executives and analysts said they aren’t expecting much substance to come from the meeting, despite the impact the war is having on both countries’ economies. The war appears to be consuming much of the attention from White House officials who might otherwise have focused on the Xi visit, said Philip Luck, an international business analyst at the Center for Strategic and International Studies think tank and a former Biden administration State Department official.

“The overarching thing is that all the indications we’re getting is there hasn’t been a huge amount of planning on this,” Luck said. “When you’re drinking from the fire hose, you can only see 2 inches from your face.”

Still, the optics are hard to ignore. The meeting comes as Trump has throttled two sources of cheap oil imported by China. China was the primary buyer of both Iranian and Venezuelan crude oil, both of which Trump has claimed the U.S. could take possession of as a result of his military actions. On Tuesday, Trump told global leaders gathered at the United Nations that the U.S. now has a primary claim to Venezuela’s oil.

“To the victor belong the spoils,” he said.

Even as the Trump administration is making it more expensive for Beijing to acquire oil, it hopes to pry China away from Russia as a source of its oil and gas and to bring it back to the U.S. market. China all but stopped buying natural gas directly from the United States since Trump slapped tariffs on U.S. imports of Chinese goods last year. China also stopped buying U.S. crude oil, though its purchases of fuel from U.S. refiners have rebounded in recent months.

The Trump administration had promised that the tariffs imposed on Chinese imports would help it strong-arm Beijing into relaxing its hold on the supplies of critical minerals and persuade Chinese companies to buy more U.S. oil and natural gas. But that hasn’t happened so far — and there’s little hope that this week’s talks will unlock any progress, said one LNG industry executive granted anonymity to speak candidly.

China’s rising energy clout comes despite the fact that it is by far the world’s biggest oil importer. But it has used that purchasing power to build a massive stockpile of crude and has emerged as a key supplier of petroleum products in the region. In recent months, Beijing has shown that its entry into those petroleum markets — or its absence — can determine what happens to energy consumers around the world.

And China is cementing its role in the global energy economy in part by offering a new type of energy security for vulnerable countries reliant on Middle Eastern oil and gas, experts said. Chinese exports of solar panels and EVs are booming, which only increases the country’s role as a major energy superpower.

“There’s this perception in China that the world is at a point where the basis of energy security is shifting from control of physical resources — barrels of oil, tons of coal — to control of technology,” said Downs, the former CIA energy analyst.

“And since China dominates the manufacturing of so many of the clean technologies, they feel like they’re in sort of a great position, not only to ensure their own energy security, but also to sell these technologies to other countries that are also looking to do the same,” Downs said.

The overall effect is that the war is boosting China’s clean energy exports into major new markets, particularly in developing countries, said Ethan Zindler, head of country and policy research at BloombergNEF and a former Treasury Department official in the Biden administration.

In regions of the globe that are still seeking to electrify, such as sub-Saharan Africa, a Chinese solar panel is going to be a more immediate solution than an American barrel of oil, he said. And as power demand grows across the globe, that means the U.S. tech sector is ceding even more ground to the Chinese, he said.

“I don’t know that the world fully understands just how much of a favor this war has been for the Chinese clean tech sector, that it came at a time when it really needed it,” he said. “And it is going to frankly allow these equipment makers to extend the lead that many of them already have over Western companies and extend their reach into far more countries.”