Cross-Strait Analysis: Taiwan Strait Tension through the lens of the Iran Conflict
Consequences of the Iran War for Cross-Strait Deterrence
The outbreak of the U.S.–Israeli war on Iran has introduced a new variable into Beijing's Taiwan calculus but has not changed its overall strategy. CSRI assesses that despite a brief intermission in PLA aircraft activity around Taiwan, China has not substantially pulled back on PLA military exercises and provocative drills around Taiwan, with overall monthly levels of activity still being consistent with longer term trends since hostilities commenced. Instead, China is likely to see the war on Iran as a strategic opportunity. Activities which distract the U.S. from challenging China in the Indo-Pacific will always be welcome in Beijing, and key U.S. munition stocks and other resources – which could otherwise be used in the Indo-Pacific – are being rapidly spent. Furthermore, the war is testing U.S. alliances with even its closest allies, and causing significant disruption to energy markets that China is better placed than most to ride out. This explains, at least in part, why China has opposed efforts to authorise the use of force at the UN. As the U.S. gets further dragged into a conflict with no clear end in sight, Beijing is reluctant to help it find a way out.
The U.S.-Israeli war on Iran has far reaching consequences, including for the balance of power in the Taiwan Strait. Several trends are worth watching for their impact on Cross-Strait relations:
China is better placed to ride out energy supply shocks: At first glance, China’s energy supply appears highly vulnerable to disruption in the Strait of Hormuz. China is the world’s largest oil importer, with 13% of its total crude imports originating from Iran in 2025, and over half of its imports pass through the Hormuz Strait. However, China has been making significant efforts to bolster its energy security in recent years. Stockpiles of oil are believed to exceed 3 months worth of demand. China is also significantly less dependent on LNG imports than other East Asian countries, such as Taiwan, and has achieved greater deployment of renewable energy production and electrification. China is exploiting its relative energy security as part of propaganda operations against Taiwan, offering energy security in exchange for ‘re-unification’. As previously analysed by CSRI, a ‘quarantine’ targeted stop and search operation on LNG tankers bound for Taiwan could put pressure on Taiwan’s energy stockpiles within a matter of weeks.
U.S. munitions depletion presents an acute risk: As analysed by Formosa Review, in the first six days of the Iran war, the U.S. expended over 300 Tomahawk cruise missiles. Last year, the U.S. manufactured a total of just 72 such missiles. THAAD interceptors and Patriot missiles present a similar challenge, with high rates of usage combined with slow production processes. With Taiwan facing major backlogs on order books of U.S. weapons systems, the re-allocation of U.S. munitions, personnel and other resources weakens deterrence across the first island chain.
China’s rare earth stranglehold exacerbates munitions depletion: Replacing destroyed radar systems requires large amounts of gallium — a material where China controls 98% of global supply. Every Patriot missile fired in the Middle East, and every radar array destroyed by asymmetric Iranian drones, deepens U.S. and allied dependence on Chinese-controlled inputs to replenish the very systems designed to defend Taiwan.
Hormuz shipping slowdown shows challenges of escorting trade in a Taiwan Strait crisis: The reluctance of shipping companies to take up U.S. President Trump’s offer to escort vessels through the Hormuz Strait shows how difficult it can be to persuade commercial vessels to sail through high risk zones. Global shipping relies on a broad ecosystem of owners, operators, crews, insurers, and financial service providers. In the event of China enforcing a blockade or ‘quarantine’ around Taiwan, the breaking of any one link in this chain could cause shipping to stop – even if the U.S. or Taiwanese government offer escorts or other forms of protection..
The Iran war may further delay Taiwan arms sales: Taiwan is still awaiting U.S. approval on a major arms package worth about $14 billion. Analysts speculated that the U.S. would likely wait until after the Xi-Trump summit before approving the package, to avoid upsetting talks. With the talks now postponed until May, Taiwan may have to wait even longer. This further complicates Taiwan’s defence build-up, with opposition parties opposing President Lai’s special defence budget and delaying payments for HIMARS and other new U.S. weapons systems. The opposition KMT is looking to strengthen dialogues with Beijing, and the Iran war strengthens critics of Lai’s DPP for being too dependent on an increasingly erratic U.S.
U.S. operations in Iran may give China new intelligence insights: China’s observation of U.S. operations in Iran – including the possibility that Beijing gains from insights shared by Tehran – could provide Chinese military planners with an extended, real-world intelligence window into American capabilities, battle tactics and operational doctrine. At the same time, the U.S. is gaining little data on how its systems would perform against China – a peer competitor with advanced air defences, the world's largest conventional missile arsenal, and the world’s largest navy.
Unpopular Iran war may lead to war fatigue at home and abroad: The Iran war is generating domestic American war fatigue at precisely the moment when public support for a credible commitment to Taiwan's defence is most needed, with outspoken critics even within Trump’s own Republican Party. An unpopular and inconclusive Middle Eastern conflict may strengthen isolationist political currents in both parties — reducing the credibility of the U.S. security guarantee that underpins Taiwan Strait deterrence.
Patience and support for U.S. policy are declining globally, compounding Taiwan's strategic position. The Iran war is deeply unpopular with the American public, with the GCC states whose populations it has unsettled, with NATO, QUAD, AUKUS and other allies who were not consulted, and across the Global South. China's global standing, by contrast, is rising — it has avoided the conflict, maintained trade relationships with all parties, and positioned itself as the responsible great power. Beijing is likely to see the fragmentation of the U.S.’ alliance network as a positive long term trend. A U.S. that is seen as reckless, distracted, and unable to honour its commitments to one set of partners will find it harder to sustain credible guarantees to another.
CSRI's bottom line on Taiwan: None of these developments individually makes a Chinese military action against Taiwan imminent or likely in the near term. Trump’s failure to bring the Iran war to a quick and conclusive end shows how destructive and protracted armed conflict can become, even when the attacker has far higher levels of resources and capability. So-called ‘re-unification’ with Taiwan remains a priority, but China’s approach is likely to continue to remain cautious. The risks of a failed Taiwan operation remain potentially existential for the CCP. Instead, continuing China’s current strategy of pursuing grey-zone coercion against Taiwan – making incremental gains and increasing pressure on Taiwan while staying below the threshold of conflict – is likely to remain the norm for the foreseeable future.
Disclaimer: This briefing is produced by the China Strategic Risks Institute (CSRI) for informational and analytical purposes only. It does not constitute financial, legal, or investment advice.