Israel’s attack on the heart of Iran in June 2025 was not just the latest episode in the long history of the Middle East conflict. It was a loud signal that great power rivalry is now transforming into an open struggle, with Asia and the Global South as the main arenas of interest. For China, which has always maintained a balance between Iran and Israel, this war is a real test of its diplomatic strategy and national interests.

China: From Balancing to Taking Sides?

China has historically pursued a policy of “dual engagement” in the Middle East, strengthening economic ties with Israel while building a strategic partnership with Iran, especially in the areas of energy and security. However, the 2025 war revealed a significant shift in Beijing’s attitude. Just a day after the Israeli attack, China’s Ambassador to the UN, Fu Cong, openly called Israel’s actions a violation of Iran’s sovereignty and territorial integrity, while urging an end to Israel’s “military adventurism.” This strong statement was reinforced by President Xi Jinping and Foreign Minister Wang Yi, who reiterated their support for Iran’s right to self-defense and rejected further US military involvement.

This policy is not just rhetoric. China is a major buyer of Iranian oil, with more than 80% of Iran’s oil exports going to China—even amid Western sanctions. The 25-year partnership signed in 2021 deepens energy dependence and infrastructure investment, making Iran a key pillar of the Belt and Road Initiative (BRI) in the region. This relationship, economically and geopolitically, positions China as the main defender of Iran’s interests in global forums.

However, this stance involves significant dangers. China-Israel relations, which were once very good in the technology and infrastructure sectors, are now going through major problems. Israel and its Western allies interpret China’s position as that of a partisanship, which is the main reason for the loss of trust and the shrinking of the dialogue space. Iran, conversely, considers China as the main strategic partner to counter the West, but at the same time, it still acknowledges the fact that Beijing will not go so far as to provide direct military assistance.

Immediate Impact on Asia and the Global South: Energy, Economics, and Uncertainty

The ripple effects of the incident were felt directly in Asia and the Global South. The skyrocketing global oil prices, reaching over $75 per barrel, set off inflation, raised the fiscal burden on energy-importing countries, and lowered people's purchasing power. Indonesia, India, and ASEAN countries instantly pulled residents out of risky areas of the conflict, boosted energy reserves, and drafted economic contingency plans for unexpected situations.

Dependence on the Middle East energy has become a strategic weakness that is beyond the talk of the town. If there is a threat to the Strait of Hormuz, which is a very important route for one-third of the world’s oil supply, then the markets will go down instantly and there will be great investment uncertainty. For the Global South countries, the volatility of energy prices means the risk of deceleration of growth, weakening of local currency, and rise of living expenses—such basic issues, that haven't been solved yet, are the ones that will exacerbate the inequality of the societies and make the potential for domestic political instability even greater.

China as Mediator: Ambitions, Challenges, and Realities

China is hunting after that drumbeat to push itself forward as a global mediator. Beijing has been very proactive in positioning itself as a peacemaker, going so far as to request a truce and a multilateral dialogue while participating in UN forums and the Shanghai Cooperation Organization (SCO). Through the official narrative and editorials in the state media, they have outlined China's position that a political solution is most important, along with respect for sovereignty and the rejection of Western-style "unilateral intervention." thus, assert its status at the UN and the SCO.

However, the limitations in the effectiveness of China’s role as a mediator are quite visible. The influence that China has in Israel is very minimal because Tel Aviv is very close to Washington and there is some doubt about Beijing’s neutrality among the Israelis. Meanwhile, China’s over-involvement in the situation may lead to a clash of the two countries. In fact, the United States, which is still the most powerful in the region, is not ready to give up its position in the Middle East. At the same time, the reality on the ground shows that although China has succeeded in constructing a new narrative as a counterbalance, the extent to which Beijing can actually alter the conflict dynamics is still narrowly limited by its military and political capabilities.

Strategic Implications: Global Polarization and the Future of Asia

The Iran-Israel conflict intensifies the global polarization that results from the Israel bloc that is made up of the US and its Western allies, and the Iran bloc consisting of China, Russia, and most of the Global South. Asian countries and those of the Global South are now in a strategic predicament: they have to find a balance in their relations with the two great powers without being dragged into a rivalry that could eventually break out into the war impacting the situation of the region.

This conflict is representing a trial for China as it shows the extent of their eagerness to become the leader of the Global South and the force that will check Western dominance. Beijing's position of vigorously supporting the principle of sovereignty and at the same time rejecting the use of force conveys a very clear message to the developing countries that have been at the receiving end of this injustice. However, there is still the matter that remains to be solved, that is, the conversion of this diplomatic capital into solving conflicts and the creation of the security mechanisms of the inclusive collective peace.

Conclusion: Asia and the Global South as Deciders of the Future

The Iran-Israel conflict and China's reaction parade a new era in world geopolitics. Asia and the Global South have become active players who decide the direction in which the global order goes, and not merely observers. Developing countries may play a more decisive role in promoting peace and prosperity in the world by constantly improving their solidarity, policy innovation, and collective diplomacy. The challenges are not few, however, the possibilities of creating a new world order that is more inclusive and fair are now fully open - and China together with Asia and the Global South is at the heart of this change.

Note: A version of this article was originally published under the title "Asia in the Iran–Israel Conflict: China, Energy, and the Future of Global South Geopolitics" by Modern Diplomacy.