The Chinese Start to Panic || Mar. 6, 2026
China is bracing for a severe energy crisis. If the Iran war continues and the Strait of Hormuz remains shut, China should start to panic...
Comments (56)
The US dollar isn't called the petro dollar for nothing: as long as most oil trades are cleared in US dollar, it will remain as reserve currency. Reserve currency allows treasuries to be sold. That debt runs the government. Oil has to be sold in dollars or no more $13 billion aircraft carriers using the wealth of the rest of the world. please correct this where its wrong.
The last time the USA used oil restriction ( oil embargo on Japan ) the direct result was the Pearl harbour attack. Lets hope that some is looking at the radar screen this time.
90% of oil from Iran went to China. 55% of oil from Venezuela went to China. China is seeing a ~17% reduction in the amount of oil it imports. Obviously, they can't sit still, but what options do they have?
This war only validates China's fears and intensifies their plans to extend claimed sovereignty over South China Sea oil reserves.
in conjunction with the targeting of the shadow fleet, is the shutting down of the Persian Gulf going to choke out both russia and china?
why is there a 4:23 update video on youtube that i can not find here? https://www.youtube.com/watch?v=Ta0Y5SqcJyc
This could benefit Canadian oil producers as oil shipped from Vancouver to the orient does not have to go through pirate infested waters and geopolitical choke points in South East Asia. Now how fast the Canadians can ramp up tar sands production to plug the gap is another matter.
So will that force Europe to import from Russia? What are the odds trump action would benefit them again?
40 days oil supply is the government SPR only. There is another 60 days supply in commercial storage so they need to see normalized flows by end of June. That does not include military storage, floating storage or sanctioned storage, which could extend their window to 80-120 days. Agree that gas is a different story with less than a month's supply.
China can cover 2–3 months of total national oil demand from storage alone, and longer if rationing or industrial prioritisation is applied. This aligns with expert assessments that China can weather multi‑month import disruptions. It is in a much weaker position with Gas .. weeks only Jim
Good!
This confirms my longstanding belief that the US should not directly intervene if China attacks Taiwan. They should merely interrupt their supply of natural resources at the source.
Excellent thread everyone. Some lovely dynamic lateral thinking in here. My gas man was here today and we had a VERY interesting discussion.
Sooooo....."Red Storm Rising: China Edition"?
Interesting. I had read elsewhere that China has stockpiled a 100-day supply of oil. Not just enough to cover 40 days of imports.
There is a long, long oil supply chain still going towards China and SE Asia along with ships sitting there fully loaded, waiting for the prices to rise. China also has a large oil storage as a national reserve. That said, the Straits are completely shut down, mainly due to having no viable war insurance that can cover a catastrophic loss of ships. That MAY come about, but it will be EXPENSIVE. It will be months before there is a solution, if then. Shipping rates have already exploded and will get unsustainable if this continues.
Why cause oil access harm to China and its people?
Collateral damage.
On the bright side there hasn't been any incusrion of Chinese planes in Taiwan sky for 6 days now.
How will the current situation affect California, given that they import most of their crude and gasoline? I know they don't import much from the Gulf states, but I assume that systemic supply constraints will affect them to some degree.
Also the shadow fleet is dying and the Russian energy is also under attack
What happens if the Soviet Union begins to fall apart? Do they emerge with China? New angle to discuss!
Russia is too proud to merge with anyone.
Plastics will be heavily affected and will not help with our inflation with packaging as an example. This war was Trump's greatest distraction.
Good point, and fertilizer too, and pharmaceuticals, etc., etc....
I’d really like to see some book recommendations from the team at ZoG. Either deeper dives on topics consistent with ZoG’s thesis, or respectable counterpoints, à la Ray Dalio, George Friedman, Jared Diamond, etc. Dalio’s ideas are pretty diametrically opposed to Peter’s, but he has quite a following, too. A debate between them would have a massive viewership.
Dalio's a low key midwit, to those in the know. Bet you never heard that take.
Elsewhere I've heard that China had been stockpiling oil reserves recently and had well over a 6 month supply. Is there a secondary strategic/military (perhaps like the US's SPR) that they can tap into?
No.
If I were into "realpolitik" I would be planning for China to annex everything between the nearest oilfields in... Siberia, say... and my best bet on a defendable hillside halfway close to current borders. Assuming Russia is currently as strong as they ever will be, I think I'd be making adjustments to ALL my world maps.
Xi is too restrained by practical realities, than to invade/attack russia, its preposterous. Don't go all-in on polymarket
Peter, does that incentivize the US to drag this out past the 40 day mark to deindustrialize China?
The 40 days was Chinese oil, not our ammo.
I have read somewhere that Chinese and Russian shadow fleets are crossing the straits just fine Is that even true ?
No. Iran has no eyes and ears to know friend or foe.
The USS Epstein gets bigger every day...
When do the Iranians run out of ammunition and munition factories? That will be the end.
We (US and Israel) are targeting the Iranian weapons DELIVERY systems very hard. (If you're a Ryan McBeth fan - the Archers, not the arrows) This will, in a fairly short time, moot the size of any stockpiles they may have (that are also being targeted, just not at the same priority) as they will have no means of launching. And while we may not have endless high end interceptors, we do have a lot of conventional guided bombs and plenty of aircraft to deliver them.
Is it feasible to see both Iran and Venezuela as attacks against the Chinese oil supply and almost nothing more? I don’t think the US is distracted with this. I think this is a move on the Risk board to see what China will do about it. Not waiting around on the demographic collapse to take them down. Force them into more desperate moves. Someone said FAFO and the US might be on the other end of that now.
I don't think that President Trump ever considered the effect that bombing Iran would have on the shipping in the Gulf. He has done it before, without this much hallabaloo. His "idea" of insuring ships and "escorting" them is NOT feasible. A few ships, yeah, but not the hundreds of ships going through the straits daily. It is going to get messy and expensive!
Okay, I was wrong, it's more than a drop in their oil bucket. But shouldn't this give them more reason to look north for resources rather than wasting blood and treasure on trying to take Taiwan?
I'm betting that one of those clients that *won't* be getting refined crude products from mainland China is Taiwan.
Similar situation in the US in 1974. We survived it, so will China.
I think this "panic" is just a temporary measure. It seemed that the Chinese have secured an exception from the Iranians to allow their ships through the strait of Hormuz. And that make sense, as Beijing is the primary supporter and trading partner of the Tehran regime. Without continual Chinese deliveries the Iranians will soon be out of a lot of essential goods, not to mention components for their drones and missiles. While the number of Chinese ships sailing is still very low now it might pick up again in the coming weeks. https://www.ndtv.com/world-news/iran-to-allow-only-chinese-vessels-through-strait-of-hormuz-sources-11167611 https://www.jpost.com/middle-east/iran-news/article-889028
The Iranians may let the Chinese (shadow) fleet thru the straight unmolested, but will the US?
If the conflict lasts until April China could also see this as an opportunity to attack Taiwan. They're already sanctioned with oil, their economy is collapsing so they're not getting stronger, and the US is distracted and running low on munitions. The only nation standing between them and Taiwan is Japan which is building their forces...
Great thread guys. I just went all in on Polymarket, thanks
A destabilized China isn't beneficial to anyone. Security, economically and supply chain - all become significant global problems. I wish I could see an easy or short term solution to this mess.
Is this likely to cause China to claim that the US actions in Iran constitute an act of war against China? We are, in effect, embargoing oil for China, whether we meant to, or not (up for debate?). And a *declared* embargo on oil, was enough for Japan to attack Pearl Harbor, once upon a time…
That's not the only reason they're in a panic. They're getting a good look at the effectiveness of the U.S. military apparatus in 2026.
You sure that’s a good thing? We didn’t telegraph this operation, we live streamed it. It’s no longer a question of “If” the U.S. will do an illegal act of aggression, it’s “Well, it’s a Friday, the S&P just had a record closing and this is where we have air craft carriers. If you have 3 aircraft carriers within x miles of your coast, hide ya kids, hide ya wife, we’re renaming your Capital Ragoon and taking your minerals and your country is called BURMA.”
I wonder what this means for North Korea. I suspect most of their supplies come as aid from China.
Bloomberg news said last night China has as much as 115 days of reserves to weather the conflict. Peter, if possible, please provide more detail on China' withering fuel reserve!
That is for critical stuff like lights and military. The rest of China will suffer quickly.
Is it Chinese panic, or is it China saying “Go F yourself US, we’re gonna make the stock market tank right now, because that’s all your Salami Loving President cares about”? If the only stick you have is burning the S+P 500, isn’t this a good way to pour on the gas?
I think the Chinese are thinking in “short term tactical mode”, at the moment. Things may work out for them, strategically, as, with this move, but I think, as of right now, it’s just a “plug the holes in the dam” response, to give them enough time to realign their long term planning with the current environment. Whatever the new normal is, after hostilities cease, in Iran, the entire international system will have to adjust their strategic thinking. Maybe a little. Maybe A LOT.