By John Q. Hosedrinker 
Despite threats to close the Strait of Hormuz amidst the U.S.-Israeli conflict with Iran, significant crude oil shipments continue to flow, primarily towards China. Monitoring firm TankerTrackers estimates at least 11.7 million barrels have passed through the strait, with Kpler estimating around 12 million barrels, although confirming final destinations has become challenging as vessels go “dark.” While traffic in the critical waterway has slowed and tanker attacks have occurred, Iran has also resumed loading at the Jask oil terminal, potentially offering an alternative route, though its logistical advantage is debated. Even with these shipments, Iran’s overall exports are lower than pre-war levels, a contrast to China’s accelerated efforts to build oil stockpiles in anticipation of supply disruptions.
Read the original article here
It appears that despite the ongoing conflict and the heightened tensions surrounding the Strait of Hormuz, oil continues to flow. Specifically, Iran has been sending millions of barrels of oil to China, navigating through this crucial waterway. This situation has led to some interesting observations about the global oil market and the geopolitical implications at play.
One prominent thought is that the Strait of Hormuz hasn’t truly been closed off; rather, it seems to have adopted a “China membership plan.” This raises the question of whether the consequence of recent military actions is higher oil prices for everyone else, while China remains relatively unaffected. It’s as if China’s strategy of “do nothing, win!” is proving remarkably effective and might shape the geopolitical landscape for this century.
There’s a sentiment that this is quite a power move, and one that might even vex certain political figures. The invasion itself, or whatever term one chooses to use for the military action, seems to have been poorly conceived from the outset. Anyone paying close attention would have anticipated that the Iranian regime wouldn’t collapse immediately and that the Strait of Hormuz would face disruption.
The expectation from established governmental bodies, like Congress, is low, with a perception of lacking resolve and a willingness to let strongman tactics prevail. However, questions are being raised about the military’s role. As the world’s most powerful military, with a history of strong logistics, it’s perplexing how a conflict could commence without a clear plan for managing critical waterways like the Strait of Hormuz, or for evacuating citizens from the region.
Naturally, in any conflict, participants will leverage any advantage they can. It’s a war, or perhaps more subtly termed an “excursion,” a “military action,” or even a “special military operation.” The fundamental need for Iran to sell its oil, its primary source of income, remains. Simultaneously, China expresses a desire to buy. A key consideration is whether the United States would be bold enough to intercept or destroy tankers destined for China. The coming days will likely provide an answer to this.
One might observe that the phrasing of “millions of barrels of oil” is more accurate than “millions of oil barrels,” humorously pointing out that individual barrels aren’t typically shipped in such vast quantities. It’s ironic to consider the significant expenditure of taxpayer money, the lives of American soldiers lost or maimed, and the tragic civilian casualties, only to find that the Iranian regime remains strong and is now exporting more oil to America’s principal rival, China.
There’s a sense of confusion regarding the status of the Strait. Earlier reports suggested it was mined, but now it seems tankers are passing through. This could be interpreted as a strategic move to spite political adversaries. Much of the oil that would have flowed through Hormuz was already destined for Asia, and diverting it to China might actually alleviate buying pressure on the global market, which some see as not entirely negative. Tankers are heading to both China and India, indicating that global energy flows rarely halt completely, even amidst conflict.
This situation is being framed by some as a display of sophisticated strategic thinking, where actions and inactions are part of a larger, intricate game. However, there’s also a more cynical view that everyone is merely a pawn in a larger scheme. The Strait of Hormuz, a vital geopolitical chokepoint, is often presented as controllable, but in reality, its influence is far more complex. Iran, by facilitating these oil shipments, appears to be calling the bluff of those who claim absolute control, with the rest of the world observing and reacting.
The notion of Iran “making barrels” adds another layer of irony to the discussion, questioning the effectiveness of the ongoing actions and whether the desired outcomes are being achieved. The destruction of valuable radar sites and the expenditure of vast amounts of ammunition in the initial stages, followed by a global oil crisis and the potential for ground troop deployment, paints a picture that doesn’t align with a successful outcome.
It’s being suggested that this situation confirms a particularly close relationship between certain political leaders and China. If these oil shipments are indeed paid for, they represent Chinese property, giving China a significant advantage. This could be an opportunity for China to assert its influence further, potentially by sharing these resources with other nations in the region, thereby enhancing its diplomatic standing and financial gains.
The idea of the US deploying naval forces to intercept tankers and force Iran’s compliance is raised, drawing a parallel to past blockades. However, it’s also acknowledged that such an action could mirror the origins of the Tanker War, a historical conflict that escalated from one-sided attacks to a full-blown naval engagement. This suggests that such a move might not be a prudent strategy.
The fact that oil prices aren’t soaring, despite reports of damaged tankers, might be linked to the continued flow of oil to China and the increasing capacity of alternative pipelines, like the Saudi pipeline to the Red Sea. This suggests that the daily loss of supply might be less severe than initially feared. The Belt and Road Initiative is also mentioned as a potential mechanism to mitigate such disruptions.
China seems to be benefiting from discounted oil from both Russia and Iran, while also potentially profiting from the sale of Russian oil to India, the redistribution of military assets, and the crippling of economies in Europe and global agriculture due to disrupted fertilizer supplies. The list of geopolitical advantages seemingly accruing to China appears extensive, prompting a sarcastic assessment of this as a “masterclass.”
However, it’s also argued that this isn’t an unqualified victory for China. A significant economic downturn in partner nations due to oil blockades could negatively impact China’s own trade and production capabilities. The idea that China isn’t paying higher oil prices due to the global market dynamics is challenged, with the understanding that reduced global supply, regardless of direct import levels, ultimately drives up prices for everyone.
The potential for Iran to retaliate by targeting other tankers if their shipments to China are interdicted is a significant concern. Such an action would likely be met with strong Chinese disapproval and could escalate the situation dramatically. It’s posited that effectively halting these shipments would require a ground invasion of Iran, a politically untenable option for many.
The fact that this outcome was predictable from the start is a recurring theme, highlighting a perceived lack of foresight in the planning of military actions. For some, the continued passage of Chinese tankers is beneficial as it mitigates the immediate supply shock to the global market. There’s speculation that China might have influenced decisions, potentially providing intelligence to ensure the safety of their oil shipments.
The emphasis on distributed, redundant energy independence as a cornerstone of national defense is highlighted, particularly in light of the resilience demonstrated by renewable energy sources compared to fossil fuels. The principle of “never interrupt your enemy when they are making a mistake” is invoked, suggesting a strategic advantage for nations that allow their adversaries to self-inflict damage.
The narrative suggests that by continuing their current course, certain nations are inadvertently allowing their rivals to gain significant geopolitical and economic advantages, while the global community is left to navigate the consequences of these actions.