China's recent discovery of over 100 million tons of crude oil and significant natural gas reserves in the South China Sea heightens regional geopolitical tensions.

This discovery, located in a disputed area, reinforces China's ambitions for maritime dominance and energy self-sufficiency. Expertssuggest it poses a challenge to India's Indo-Pacific strategy and calls for enhanced cooperation within QUAD nations and ASEAN.

The oil find is likely to strengthen Beijing’s self-reliance in energy, reduce dependency on imports, and militarily reinforce its claims in disputed waters—heightening tensions across the Indo-Pacific.

China National Offshore Oil Corporation (CNOOC), on 6 April 2025, announced a major hydrocarbon discovery of over 100 million tons of crude oil and 380 billion cubic feet of natural gas in the Caping South area of the Pearl River Mouth Basin. The site is about 300 kilometers off Guangdong province in the South China Sea. The breakthrough was confirmed through the Caping South 1-1 well, drilled to a depth of 3,462 meters, with 35.2 meters of productive strata.

The South China Sea is already a geopolitical flashpoint with long-standing territorial disputes involving Vietnam, the Philippines, Malaysia, and Taiwan. The discovery is not just an energy milestone—it signals China's intent to consolidate control in a contested maritime zone.

“This is a strategic turning point not just for China’s energy landscape, but for its geopolitical ambitions in the Indo-Pacific,” said Dr Sun Yun, Director of the China Program at the Stimson Center.

The oil find is likely to strengthen Beijing’s self-reliance in energy, reduce dependency on imports, and militarily reinforce its claims in disputed waters—heightening tensions across the Indo-Pacific.

Security analysts say this bolsters China’s oil diplomacy, a broader agenda intertwining energy dominance, naval expansion, and control over key maritime trade routes. The move challenges existing maritime order and directly undermines efforts led by QUAD nations—India, the US, Japan, and Australia—to ensure freedom of navigation and regional stability.

A Red flag for India?

For India, the discovery is both an economic and strategic red flag. India’s Act East Policy and Indo-Pacific Strategy are deeply linked to the region’s energy routes and maritime mobility. “India must respond through strategic cooperation with ASEAN nations and deepen engagement with QUAD,” said Commodore Uday Bhaskar (Retd), Director of Society for Policy Studies.

He added that ONGC Videsh, India's overseas oil exploration arm, must accelerate its joint ventures in Vietnamese waters to counterbalance Chinese dominance.

Experts warn that China’s latest discovery could prompt a shift in the regional power equation, with energy acting as the new frontier of conflict. Defense diplomacy and energy security cooperation must now take priority for India and its strategic partners. “This is no longer just about oil—it’s about maritime supremacy,” said Dr Rajeev Ranjan Chaturvedy, a maritime expert at NTU Singapore. “A clear and collective strategy is required.”

China now wants strategic control over the Indo-Pacific region, not just its economy, through oil. Countries like the US and Japan are already doing naval patrolling in this region, but now there is a need for a more clear and organized strategy. This policy of China is being called “Oil Diplomacy”, in which capture of energy resources, militarization of the maritime area, control over trade routes are going on simultaneously.

This quest of China is much more than energy. This is the next phase of the battle for maritime supremacy, which includes the policies of regional powers, military strategy and global alliances.