How the Iran Conflict Is Reshaping Russia and China's Energy Security

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Mar 10, 2026

Guest

Sergey Vakulenko

Sergey Vakulenko, former Gazprom Neft strategist now at Carnegie, offers industry-insider views on Russian upstream and downstream limits. Tatiana Mitrova, CGEP expert on Russian oil and sanctions, analyzes production and pricing constraints. Erica Downs, CGEP China specialist, explains Chinese LNG, storage, and refinery responses. They discuss Russia’s short-term market gains, China’s coping strategies, pipeline vs LNG choices, and risks of global energy fragmentation.

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INSIGHT

China Taps Stocks and Russia But Teapots Are Vulnerable

China will look to Russia to replace lost Gulf oil volumes but has large oil stockpiles (1.4 billion barrels) to buffer short disruptions.
Erica Downs notes many Chinese teapot refineries rely on discounted sanctioned barrels and face acute strain from Gulf supply loss.

INSIGHT

Gulf Shock Vindicates China's Electrification Bet

The Gulf crisis validates China's long-term strategy of diversification and electrification as a path to energy self-reliance.
Erica Downs predicts China will keep betting big on electrification and domestic renewables to reduce import exposure.

INSIGHT

Repeated Drone Attacks Erode Russian Energy Capacity

Ukrainian drone attacks, repeated in waves, create cumulative damage that reduces Russian downstream flexibility and shortens equipment life.
Tatiana Mitrova describes 'thousand bites' tactics that slowly erode industry adaptability despite continued resilience.

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Since the US-Israeli bombing campaign began in Iran, energy markets around the world have been on edge as the conflict threatens immediate and long-term energy supplies. We've seen major disruptions throughout the Gulf region, with the closure of the Strait of Hormuz and massive price spikes and swings in oil and natural gas.

This is of course exposing serious vulnerabilities across global energy markets and it's putting a spotlight on what's happening in the deeply integrated markets of Russia and China.

Even before the conflict started, Russia's energy sector was struggling under the weight of infrastructure damage inflicted by Ukrainian forces. But now Russia has emerged as an unlikely safety valve for the market, benefiting from the massive supply shortages.

Meanwhile, China finds itself in a precarious balancing act; it is being forced to look at alternative markets for relief and is reportedly reviving discussions around major energy projects, such as the Power of Siberia 2 natural gas pipeline with Russia.

So how is Russia responding to the current crisis? And how is it impacting China, which is particularly exposed to disruptions in Gulf energy flows? How might this crisis change Russia's approach to the European energy market? And is the conflict accelerating a deeper fragmentation — moving toward a world of competing energy blocs rather than a single global energy market?

Today on the show, Jason Bordoff speaks with Erica Downs, Tatiana Mitrova and Sergey Vakulenko about how the crisis in the Middle East is impacting Russia and China and what each country stands to gain or lose.

Tatiana is a global fellow at CGEP. She has deep expertise in Russian and global energy markets, including production and pricing.

Erica is a senior research scholar at CGEP, where she focuses on Chinese energy markets and geopolitics.

Sergey is a senior fellow at the Carnegie Russia Eurasia Center. Prior to this, he led strategy, innovations, and sustainability at the Russian oil producer Gazprom Neft.

Credits: Hosted by Jason Bordoff and Bill Loveless. Produced by Mary Catherine O'Connor, Caroline Pitman, and Kyu Lee. Engineering by Gregory Vilfranc.