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Despite being Iran's ally, China is highly vulnerable to a prolonged Hormuz crisis. If the economic damage becomes severe enough, China may be forced into an ironic alliance with the US to resolve the conflict, prioritizing its own stability over its geopolitical partnership with Iran.
The push for conflict with Iran wasn't just about nuclear threats but a calculated move. By controlling the Strait of Hormuz, the US could cut off China's primary oil source, forcing them into economic concessions and shoring up the US dollar.
The U.S. wields significant economic leverage over China by disrupting its access to cheap oil from Iran and Venezuela. This control over a critical resource, representing roughly 38% of China's supply, acts as a powerful negotiating chip that forces China to engage.
Protests in Iran, if they disrupt the regime, could halt cheap oil flows to China. This would force China to buy from more expensive, US-friendly markets, strengthening the US dollar's global dominance and isolating anti-Western powers without direct US intervention.
The predicted US military action in Iran serves a dual purpose. After shutting down oil from the Strait of Hormuz, Trump will leverage China's dependence on that oil. He will offer to reopen the spigot only if China assists in secularizing Iran and removing its uranium, using economic pressure to achieve geopolitical goals.
The standoff over Iran is a contest of economic staying power. The US (energy self-sufficient) and China (massive stockpiles, Russian partnership) can endure a prolonged crisis. However, Europe and many emerging economies lack this resilience and will be the first to suffer severe consequences.
The move against Iran is not just a regional conflict but part of a grand strategy to disrupt the China-Russia-Iran-North Korea axis. By attempting to cut off China's access to cheap oil from Iran and Venezuela, the goal is to weaken China’s economic rise, even at the risk of global instability.
Kevin O'Leary argues China holds the key to peace in the Middle East. Because China relies on the Strait of Hormuz for nearly half its energy, its leader has more leverage than anyone to force a deal to stabilize the region for economic reasons.
China's extreme reliance on oil from Iran and Venezuela (20% of domestic consumption) makes it the party most hurt by the conflict. This gives the US leverage, pressuring Xi Jinping to negotiate a resolution to secure China's energy supply and stabilize its economy.
While facing economic headwinds from the oil crisis, China is positioning the US-Iran conflict as a geopolitical victory. It portrays the US as a chaotic, destabilizing force, contrasting itself as a stable superpower and capitalizing on the global fallout from what it terms 'poor strategic coordination' by Washington.
Despite relying on Iranian oil, China is avoiding strong support for Tehran to protect its oil supply through the Strait of Hormuz and prevent economic reprisals from the U.S. This pragmatic, transactional approach prioritizes economic stability over ideological or military alliances.