China spent 10 billion on oil it did not need. With Hormuz blocked, the puzzle finally makes sense
As the West panics over the possibility of the barrel break the $100 barrieran eerie calm reigns in Beijing. The Asian giant observes the crisis with the coldness of someone who has already done his homework. During the last few months, the world has been debating the excess oil supply, but the real winner of this war crisis is not firing missiles, but has been filling its storage tanks for years in the most absolute silence. World geopolitics has been blown up a few weeks before the expected summit between Donald Trump and Xi Jinping. As reported Nikkei Asiathe coordinated airstrikes of the United States and Israel (dubbed “Operation Epic Fury“) have culminated in the assassination of the Iranian supreme leader, Ayatollah Ali Khamenei. Tehran’s response has been a rain of missiles and drones on American allies in the region. The immediate impact has been felt in the water. The Strait of Hormuz, through which 20 million barrels a day flow (20% of the world’s oil supply), is blocked de facto. As detailed Bloomberg, Rates to hire a supertanker on the route from the Middle East to China have skyrocketed by 600%, reaching $200,000 a day (or 525 Worldscale points for a Suezmax). Besides, France 24 points out that insurers They have increased war risk premiums between 25% and 50%. As reported cnnBrent crude oil jumped 6.5% in the early stages, touching $82, driven by fear of prolonged logistical disruptions. Bob McNally, president of Rapidan Energy Group, warned the US chain that closing Hormuz would cause an immediate global energy crisis. China’s exposed vulnerability On paper, the Donald Trump administration’s offensive should be an absolute nightmare for Xi Jinping. As explained The TelegraphAmerican military adventurism is exposing the gigantic energy vulnerability of China, the largest oil importer in the world, which buys three-quarters of the crude oil it consumes abroad. Washington’s strategy seems clear: suffocate the “rebellious” suppliers that supply the Chinese industrial machinery at bargain prices. Earlier this year, the military capture of Nicolás Maduro has established what some analysts They already call the “Donroe Doctrine”. Trump has been explicit in his goal to control oil. If the United States manages to add Venezuelan production to that of Guyana and its own, it would de facto control 30% of the world’s reserves, according to JP Morgan. This movement cuts supply to China in the bud, evaporating imports that represented around 4% of its maritime purchases. according to data from Kpler collected by The Financial Review. However, Washington’s optimism collides with geology: the infrastructure is so in ruins that loading a supertanker today takes five days and the crude oil arrives so “dirty” that the Chinese and Indian refineries themselves have canceled orders, according to a Reuters investigation. Refloating this industry will cost 10 billion dollars annually for a decade, as Francisco Monaldi calculatesdirector of energy policy at Rice University. For its part, the current blow to Iran. From Chosun Daily details that China bought 80% of Iranian maritime exports last year (about 1.38 million barrels per day), which represents 13.4% of Beijing’s total maritime crude oil imports. As he points out Institute for Energy Research (IER) United States, cited by the same mediumChina has used the heavily sanctioned and cheap oil from these countries to cement its manufacturing competitiveness. Losing Iran and Venezuela would force Chinese refiners — especially the independent ones in Shandong, known as “teapots” — to look for much more expensive substitutes on the open market, threatening to import inflation and slow their economic growth. The master plan in execution If Western analysts expected to see China cornered, they were wrong. Beijing foresaw this scenario of isolation and has been executing a four-pronged master plan for years that today allows it to cushion the blow of Hormuz. While in 2025 the world feared a global oversupply, China dedicated itself to massive purchasing. Last year, China spent $10 billion buying an extra 150 million barrels that it didn’t immediately need, absorbing more than 90% of crude oil storage measurable globally. Supported by a new Energy Law that obliges the public and private sector to maintain reserves, Beijing today has strategic reserves equivalent to at least 96 days of imports, according to The Telegraph. Under the banner of national security, China is investing $80 billion annually in its state oil fields. In March 2025 they reached a production peak of 4.6 million barrels per day and they completed the drilling of the deepest oil well in Asia (10,910 meters). Its goal is not financial profitability, but pure autonomy. With Iran and Venezuela under fire, China has simply turned its head toward Russia and Saudi Arabia. According to oil price, Chinese refineries are absorbing record amounts of Russian crude oil (more than 2 million barrels per day in February 2026), taking advantage of the fact that India has given in to pressure from the US to stop buying from Moscow. Simultaneously, Saudi Arabia has cut the official price of its crude oil Arab Light to five-year lows to gain market share in Asia, which has led China to order between 56 and 57 million Saudi barrels by March. China’s definitive move is to abandon the oil board. As analyzed by Professor Hussein Dia in The ConversationChina’s massive commitment to electric vehicles (50% of new car sales last year) and renewable energy is a national security policy. How they collect in The Telegraph, The new five-year plan (2026-2030) seeks to peak oil consumption by accelerating the installation of solar and wind parks (430 gigawatts added last year alone). Unlike the ships in Hormuz, sunlight cannot be blocked by the US Fifth Fleet. The diplomacy of silence and the illusion of OPEC+ In the face of Khamenei’s assassination, the response of the Chinese Foreign Ministry has been one of calculated coldness. They condemned the act as “unacceptable” and a “violation of sovereignty,” but, as pointed out Chosun Dailythey carefully avoided directly mentioning Donald Trump. From Nikkei Asia explains this pragmatism: … Read more
