For most of the past decade, China’s story in the Middle East has been straightforward: endlessly rising investment, trade and influence. Having brokered a return to diplomatic relations between Saudi Arabia and Iran earlier this year and given its strong economic relationship with Israel, China has also found itself in the spotlight as the conflict in Gaza has boiled over.

But is the Middle East destined to keep becoming—economically, at least—less middle and more east?

Perhaps not—at least, not as rapidly as seemed likely just a few years ago. Two pillars of China’s rising sway in the region, energy purchases and overseas investment, are in significant flux.

Most obviously, China’s oil imports have lurched decisively toward Russia since the outbreak of the Ukraine war, to the point where it has become China’s biggest supplier. Chinese imports of Russian crude in the third quarter of 2023 were 42% higher than in the third quarter 2021, according to figures from data provider CEIC. Imports from Iraq were up just 6%. And imports from Saudi Arabia, previously China’s top oil supplier, were down 11%.

In the short run, lack of Russian pipeline capacity might limit how much further that change can progress—but over the long run, the geopolitical logic of higher imports over land from Russia, rather than over sea from the Middle East, might be difficult to ignore. As long as tensions with the U.S. remain elevated, China will have a strong incentive to work with Russia to further expand pipeline capacity, especially since, in the event of any future conflict with the West, sea lanes would be vulnerable. China’s own slowing growth, particularly in energy-hungry, construction-related heavy industrial sectors such as petrochemicals, could also weigh on its oil demand growth for years.

China’s role as an endless font of investment capital for Middle Eastern economies also looks more uncertain than it did a couple of years ago. In 2021, the Middle East and North Africa became the top destination of new funding from the Belt and Road Initiative—China’s trillion-dollar overseas infrastructure program—receiving about 29% of the $59 billion of total investment and BRI contracts that year, according to a report from the Green Finance and Development Center at Fudan University. But as a whole, the ambition and scale of the BRI have taken a significant hit in recent years, owing in part to the pandemic and rising concerns over debt and project quality in China and abroad.

Major BRI deals signed in the first half of 2023 added up to about $40 billion, according to data from the American Enterprise Institute. That would put total deal volume on track for its highest level since 2019—but still well below annual levels of above $100 billion routinely notched before the pandemic.

And outside official BRI projects, the foreign investment picture looks even less rosy. China’s net overseas direct investment in the eight largest Middle Eastern economies, excluding Israel and Iran, fell by about a third in 2021 from 2020 levels, according to CEIC data. China wasn’t among the top 10 investors in Arab countries in 2022—in capital expenditure terms—for the first time since at least 2018, according to data from the Arab Investment and Credit Guarantee Corp., a multilateral credit insurer funded by Arab states and based in Kuwait.

Investment will probably recover this year and next, now that China has abandoned its Covid-19 controls and begun to re-engage with the world. Official Chinese data puts total outbound foreign direct investment, or FDI, up 6.7%, year over year in the first three quarters of the year. And nonfinancial belt and road investment is up 50%.

But China’s rising financial burdens at home—particularly the collateral damage to banks and state balance sheets from the continuing property and local government fiscal meltdown—will also probably mean it needs to be more parsimonious abroad in the years ahead. And as foreign investment in China from the West continues to evaporate, many Chinese firms might increasingly begin looking to dollar-rich Middle Eastern financiers for capital, rather than the other way around.

Finally, China’s refusal to forthrightly condemn the attack from Hamas could limit its opportunities to invest further in Israel’s high-tech sector in the future—although bilateral trade will probably remain large. China is currently Israel’s second-largest trading partner.

And China is the world’s top energy consumer, which means it will have an enduring interest, and enormous influence, in the Middle East for a long time. But the events of the past three years have also upended global energy markets and assumptions about China’s growth. That will have an impact on the shifting sands of the Middle East, too.