The ongoing war in Iran, ignited by a combination of US and Israeli strikes on a globally recognised state-sponsor of terror across the Middle East, has unleashed a destructive chain reaction with far more losers than winners. Yet, in Asia, certain nations and in particular commercial interests are already emerging as net beneficiaries of this instability – but not for reasons that make the world a safer or even more prosperous place.

The fundamental tragedy of the war is that the world would be a far more peaceful, secure place without the Iranian regime in its present form. Iran’s revolutionary government has spent decades exporting violence and destabilising its neighbours through militias and terror networks. In recent years, this has been made worse by the nation’s nuclear brinkmanship with Tehran working to hide a uranium enrichment program at levels far above Joint Comprehensive Plan of Action (JCPOA) limits as agreed in 2015, including up to 60 % purity - far higher than the ~3.67% allowed under the deal.

These issues, coupled to a fanatical ideology anchored in clerical absolutism, has made peace impossible and diplomacy largely futile. In turn this has led to a perpetual tinderbox of sorts, in a region that yearns for stability but is denied it year after year, decade after decade by Iran.

A post‑regime Iran in the eyes of most would almost certainly be less hostile to its neighbours while being more integrated into global commerce and far less inclined to provoke confrontation with the West.

Yet for all that, what is happening on the battlefield also reveals the transactional methodology of modern-warfare – and the almost cynical way in which one major Asian power is responding. That power is Beijing – supposed friend and long-time backer of the Iranian regime.

China’s Middle East power play

The People’s Republic of China (PRC) is the most significant Asian nation working to reshape its global standing in light of the conflict.

Officially, Beijing proclaims neutrality. It always does. But while China is openly calling for dialogue and sticking to diplomatic channels, as well as carefully avoiding any involvement in combat operations, in reality, its policy has been anything but neutral in terms of consequences. Beijing quietly welcomes any and all conflicts that distract the United States and its allies from the Indo‑Pacific theatre; a fact lost on many not in the region. In the process, this permits the ruling Communist Party to fortify influence closer to home, while Washington is focussed on the latest Iran-linked flare-up in the Persian Gulf.

This is classic great‑power realpolitik: leveraging the missteps of rivals without in any significant way committing to their cause.

To this end, as Iranians die on an almost daily basis, Chinese leaders have made it plain that their primary concern is not the survival of the Iranian regime. Instead, Beijing’s only real interest is in ensuring the preservation of uninterrupted energy flows. And, should the regime be overturned in the process, the opening of post‑war reconstruction contracts would be a more than welcome foothold in the region for the world’s second largest economy.

Yet this calculated stance also shows how Beijing currently uses Iran for its own strategic ends. The war – or to be more precise the on-again, off-again closure of the Strait of Hormuz – has disrupted global energy markets. Asia has been particularly hard hit. In turn prices have been driven up and Asian governments have been forced into energy triage, as supply through the Strait has plummeted.

China’s diversified energy sourcing – coal and renewables as well as LNG coming in from elsewhere – tied to its plentiful energy stockpiles have, however, given it a comparative advantage when held up against other Asian nations. This has allowed China to weather the ongoing energy disruptions better than many of its neighbours, and to some extent even position itself as a stabilising supplier in petrochemicals and other much sought after commodities.

Proponents of this approach will argue with some justification that China’s markets and state apparatus have proved resilient. In many ways they have as Chinese equities and the yuan have held up better than many of their Asian peers.

At the same time, sources in China indicate that state energy giant PetroChina has reported that most operations remain largely normal despite the chaos caused by the Iran war. But resilience is not the same as moral leadership when seen through global eyes.

Misplaced beneficiaries

Other Asian economies have benefited much less from the war than China. Japan, South Korea, India and many Southeast Asian nations such as Vietnam, the Philippines and Thailand are all dealing with acute energy insecurity. In some cases this is sparking inflation and causing supply shocks. Lengthy lines at petrol stations across the continent are the new norm.

What binds these developments together, however, is the realisation that no Asian state prospers in the long term from the continuation of a war that chokes global energy supplies and squeezes economies. The supposed beneficiaries in such cases are only the likes of China and any other powers adept at exploiting disorder, or, in some cases, internal actors cushioned by state ownership and market insulation.

Herein lies the somewhat ironic reality: the very same conditions that have made Chinese interests appear to benefit from the conflict are the same conditions that would be alleviated by the removal of a long-term terror linked Iranian‑regime.

Only by way of free trade and secure energy transit routes as well as the rule of law already enjoyed across much of East Asia being brought to bear in the west of the continent, would the wider world and the rest of Asia benefit.

In the short-term, while China may superficially at least, be seen as winning in the geopolitical reshuffling brought about by the war, such gains are built on a foundation of instability.

The world needs a stable Asia – East and West – and would be better served by the removal of the current Iranian regime. Only in the removal of said regime will Beijing be forced back into a more constrained, less opportunistic global role.