ASEAN Beat | Security | Southeast Asia

Myanmar’s Depleted Oil Pipeline

A cross-border energy project deals with the impact of two conflicts.

A sub-pumping station of Sino-Myanmar oil and gas pipelines in Longling County, Yunnan Province, China.

An oil pipeline carrying imported crude from Myanmar to China is facing a two-front crisis: armed conflict at home and a maritime blockade overseas.

The pipeline is connected to a crude oil terminal built to accommodate large tankers transporting fuel from the Middle East.  Earlier this year, artillery shells and other munitions reportedly landed in the port town of Kyaukphyu, a few miles from the pipeline and fuel storage tanks.

The Myanmar military’s frequent clashes with the Arakan Army, an insurgent group that now controls 90 percent of Rakhine State, pose a threat to China-funded energy projects in the region.

A slowdown in tanker traffic from the Persian Gulf has further dented the pipeline’s capacity to supply oil to China’s western provinces.

The maritime data firm Kpler reports that China’s oil imports, including deliveries from the Myanmar pipeline, were expected to fall to 6.78 million barrels per day for May, the “lowest level in almost a decade.”

Myanmar’s military currently controls only three coastal towns in Rakhine State. The Arakan Army (AA) won pivotal victories in December 2024, when its troops captured the military’s western command headquarters and took control of the 270-kilometer border with Bangladesh. “AA has emerged as the most powerful and influential rebel group in Myanmar’s decades-long civil war,” wrote a Dhaka-based academic in Jamestown, a defense policy publication in Washington, D.C.

The Arakan Army’s rapid consolidation of territory has “generated unease” in Beijing about the security of China-Myanmar projects in Rakhine State. In February, a power plant connected to the Kyaukphyu Special Economic Zone (SEZ) was dismantled for relocation.  “They are taking the plant apart as quickly as they can to avoid it getting damaged in the fighting,” a resident of Kyaukphyu township told Burma News International.  Clashes between the military and the AA took place three kilometers away from the project.

Myanmar’s State Administration Council passed a law in February 2025 permitting foreign private security firms to operate in the country. The legislation was reportedly passed to give China-affiliated ventures the option of reinforcing security arrangements at conflict-prone locations.

In June, Myanmar’s president was invited to Beijing for a state visit. Min Aung Hlaing was given a red-carpet welcome, but China’s President Xi........

© The Diplomat