The Third Gulf War is here and the global oil market looks into the abyss. The blockade of the Strait of Hormuz has unleashed an unprecedented logistical panic and has catapulted the barrel of Brent well above $100. The panic is palpable throughout the Asian continent: The Philippines cuts working hours, Singapore sends its office workers to telework and Thailand intervenes in diesel prices in desperation.
Just a few thousand kilometers away, China observes the global chaos with an almost insulting coldness. The Asian giant has not been saved by providence, but by millimetric planning. Just as centuries ago it built a vast stone infrastructure to stop nomadic invasions, Beijing has been building an invisible Great Wall for more than a decade to isolate itself from fossil volatility.
The seed of this resistance must be found five years ago. In 2021, during a visit to an oil field, President Xi Jinping ruled that China should keep the “energy rice bowl” firmly in its own hands. According to The Economisttransferring this traditional metaphor (historically used to appeal to food sovereignty) to energy, made clear a state obsession: the country was going to prepare tirelessly for the worst possible scenario.
Is patience a good bet?
There are several popular proverbs and sayings that say that whoever waits, victory will be sweeter. In the case of China it is a pure and simple pragmatic and geostrategic application. As we analyze in Xatakathis shielding is the direct result of the strategy “Made in China 2025” designed a decade ago.
The Chinese government understood that dependence on foreign oil and gas was its greatest military and economic vulnerability. Mass electrification was not an environmental whim, but a matter of national survival. Today, China generates more than a quarter of its electricity with sun and wind, rewriting the world order and dividing the board between the old “petrostates” and the new “electrostates.”
But while that transition is complete, Beijing has not neglected the fossil economy. The Chinese model puts raw resilience before the efficiency of Western markets, As a column points out Five Days.
The best example is what happened last year. While global markets debated an alleged oil oversupply, China took advantage of the low prices to spend $10 billion buying heavily sanctioned oil from Russia, Venezuela and Iran; a crude oil that, in reality, I did not need immediately. The result of this silent hoarding is that today China has massive Strategic Petroleum Reserves (SPR), estimated between 900 and 1.4 billion barrels. This mattress is enough to cover between 96 and 140 days of your internal demand without caring for a single drop from the outside.
The shield in action
This long-term preparation has allowed China to deploy an arsenal of almost immediate containment measures since the conflict in the Gulf broke out:
- Closing energy borders: The first lightning order from the Chinese National Development and Reform Commission was to demand from their state giants of refining (PetroChina, Sinopec, CNOOC) to immediately suspend gasoline and diesel exports to protect the supply of the domestic market.
- The “shadow fleet”: Despite the war and the blockade, oil continues to flow to China. Iran is exporting a daily average of 2.1 million barrels using a fleet of old oil tankers without tracking systems that operate outside the US financial system.
- Land alternatives: To completely avoid the vulnerable Strait of Hormuz, the Asian power is squeezing to the maximum the land pipelines that connect it directly with Russia and Kazakhstan.
- Renewable bestiality: This is your shield more impenetrable: The price of solar panels and electric cars does not rise when there is a war in the Persian Gulf. In July 2024, China reached its goal of 1,200 GW of wind and solar capacity, achieving it six years ahead of schedule. In addition, new energy vehicles have already exceeded 60% of total car sales in the country by the end of 2025.
- Megainfrastructures and market reform: To manage the intermittency of renewables, increased their storage capacity by batteries 75% in 2025. Furthermore, the political response does not stop, as detailed ChinaDailyhave announced that the National Energy Administration will launch urgent reforms ahead of the 15th Five-Year Plan (2026-2030) to create a “unified national energy market” capable of managing the volatility of having so much green energy on the grid.
- The dominance of uranium: Faced with the need to fuel its 58 operational nuclear reactors and the 27 under construction, Beijing has budgeted about $16 billion for resource storage in 2026. This includes the exploitation of gigantic deposits in the Ordos Desert and the pioneering extraction of uranium from seawater.
The small print
However, China’s energy “rice bowl” still has cracks. To keep the system afloat, the country remains dependent on an immense, dirty safety net: the coal. In 2024, this mineral supplied 56% of its energy primary and, currently, they have more than 300 plants under construction. As emphasized a report of ChinaPower Projectdespite the pollution, the vast and abundant supply of coal offers Chinese policymakers a true final “safety net” against disruptions from other sources.
But the real battle for survival is not only fought in the oil wells, but in the semiconductor laboratories. Although the country manufactured an astronomical 484 billion chips in 2024, still no access to the UVE lithography machines of the European company ASML.
However, the Asian giant is finding cracks in the Western blockade. China already has two companies, SMIC and Huali Microelectronics, capable of producing advanced 7-nanometer chips using engineering techniques ‘multiple patterning’ using machines from previous generations. It is a more expensive and less efficient process, but it shows that sanctions only accelerate their quest for sovereignty.
The next bottleneck to overcome is chemical. The country depends almost entirely on Japan (specifically from JSR Corporation) to obtain the hyper-specialized photoresist liquids needed in chip lithography. The new Chinese five-year plan has already set a five-year deadline to also break this Japanese monopoly.
And while China weaves this net of absolute industrial safety, its technological rivals tremble. The closure of Hormuz chokes not only oil, but the Middle East Liquefied Natural Gas (LNG) on which Taiwan’s power grid depends. TSMC, the world’s largest chip manufacturer, operates on an island that barely has 11 days’ worth of LNG reserves. If the blockade is prolonged, the global production of Artificial Intelligence chips could be completely paralyzedshowing that the energy vulnerability of the West and its allies is a systemic risk.
The decline of petrostates
The current crisis in the Middle East has exposed a brutal geopolitical irony. While the West hyperventilates in the face of atavistic terror to revive the oil inflation of 1973 and fights for the few barrels that the drones manage to avoid in the Strait of Hormuz, the true energy war of the 21st century has already been quietly won by Beijing.
In 1973 the Arab embargo changed the inefficient and gigantic American V8s for the economical Japanese cars. Today, the closing of Hormuz is doing exactly the same thing on a global scale: power an electric car that can travel six times the same distance as a diesel for the same money. Only this time the undisputed winner is no longer in Tokyo, but in China.
The era of petrostates, dependent on vulnerable sea routes and unstable markets, is coming to an end to hand over the baton to China, the first great “electrostate” on the planet. As I pointed out The Economist When analyzing this strategy, what in peacetime in the West was seen as the paranoia of an autocrat, today has been revealed as the utmost prudence. Xi Jinping looked to the future five years ago, and today his “energy rice bowl” is full to the brim.
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