COMMENT: Iran was the prequel, China is the target

When Alexei Maslov, one of Russia's best-known Sinologists, told Sputnik radio on April 24 that the true purpose of the US campaign against Iran had been to wound China rather than Tehran, the remark read at first like standard Moscow framing. Iran, he argued, had never truly threatened American interests, a minnow and only a potential regional nuisance. What Iran did provide before the ongoing US blockade was roughly a fifth of China's discounted crude, acquired under sanctions and shipped through the Strait of Hormuz. Knock Iran out of that equation, hit Venezuela in parallel, and Beijing's carefully balanced system of diversified oil sourcing begins to wobble.

Dismiss Maslov's analysis as Kremlin-adjacent opinion if you like. The trouble is that it is echoed, in sober language, by institutions with no interest in flattering Putin.

The Washington-based Center for Strategic and International Studies (CSIS) modelled the Iran scenarios in early March and concluded that a US or Israeli move against Iranian shipments could disrupt up to 1.6 mn barrels a day of exports, "all of which go to China." The American Action Forum put the combined Iran-Venezuela shortfall at close to one-fifth of Chinese oil supply. Bruegel, the Brussels think tank, calculated that sustained prices near $100 a barrel would trim about 0.5% from Chinese GDP for every 25% rise in crude, and warned that Beijing's fiscal space to cushion households had already been spent. None of these are friendly readings for the Zhongnanhai.

The sharpest framing, though, came from within China itself. Gu Dingguo, a research fellow at East China Normal University, told the South China Morning Post this week that the Iran war demonstrated a coming US strategy of "containment via maritime chokepoints", aimed squarely at Beijing's shipping lanes. His recommendation that China build a more formidable blue-water navy was less striking than his diagnosis: that Washington's Iran file could not be read in isolation.

If he is right, several pieces of the last two months fall into place. In early January, US forces entered Venezuela; by late February, Operation Roaring Lion and its American counterpart had begun degrading Iran's missile programme and leadership. Qatar's Ras Laffan LNG complex took a direct hit on March 18, knocking 17% off output and lifting Asian spot gas prices by more than 140%. By March 31, Brent had spent weeks above $100 and US pump prices had hit $4 a gallon. The International Energy Agency's director called it "the greatest global energy security challenge in history". Two of the three cheap-oil lifelines China had patiently assembled over a decade were under direct American pressure within sixty days of each other.

Beijing has weathered the immediate shock better than its neighbours. Chinese oil imports surged 16% in January and February as refiners topped up strategic reserves, and state firms have been quietly cleared to tap commercial stocks. Diversification, long dismissed by Western commentators as rhetorical, has bought China roughly three months of breathing space. Yet, as CNN noted earlier this month, the costs are beginning to show. The central planner in Beijing has intervened repeatedly to cap domestic diesel and petrol prices. Household consumption, already weak, is being squeezed by imported inflation. A ceasefire has held uneasily since April 7, but the US naval blockade of Iranian ports is keeping roughly 1.6 mn b/d out of Chinese refineries.

The uncomfortable question for Europe and Asia is whether this was a strategic design or a strategic windfall. The Foreign Affairs essay published this week, "How China and Russia Can Exploit the Iran War", explicitly urges Washington to avoid "maximalist goals" in the Gulf so that Beijing is denied an opening. The implicit admission is that the United States is already fighting two wars at once: a hot one against Iran, and a slower economic one against China's energy lifelines. The Pentagon's redeployment of a THAAD battery from South Korea, and the movement of the USS Abraham Lincoln strike group out of the South China Sea into the Gulf, tells its own story about where American attention has been pulled.

The longer-term costs accrue to everyone. Southeast Asia, which the Atlantic Council's energy centre called the first casualty, is rationing fuel. Europe, already carrying Ukraine, is absorbing a second energy shock before it has digested the first. Global food prices are being pushed up by fuel and fertiliser costs. The Bruegel analysis warns that a sustained drag on Chinese consumption will feed back into a slump in global trade, with German and Japanese exporters among those most exposed. In this telling, the collateral damage from the Iran campaign is not Iran itself but the international system's two largest manufacturing economies.

None of this requires believing that a single architect in the White House drew a grand plan on a napkin. Strategy in Washington is rarely that coherent. It does, though, require taking seriously that Iran may have been the prequel rather than the main feature. The administration's sequencing, Venezuela, then Iran, then quiet pressure on Russia's oil revenues through the Ukrainian long-range drone campaign, closes off precisely the suppliers that underwrite Chinese resilience. What follows is harder. Beijing's pivot towards overland Russian crude, accelerated by the Iran war, comes with its own price: deeper dependence on Moscow at exactly the moment the Kremlin's leverage over its junior partner is growing.

Markets have so far read the ceasefire as a reason to price the crisis out. Brent's forward curve for January 2027 sits near $70. That may prove to be the most expensive assumption of the decade and will likely cost many a trader his shirt in the next few months.

If the analysts from Moscow to Shanghai to Washington are reading the signals correctly, its real target has not yet been struck and there is not likely to be a "deal" between the US and Iran, as that does not serve the longer purposes of the new American century so to speak of total American domination of the global trading system. Europe and Britain have been cast out, Nato looks not long for the world, and Gulf Arabs are now openly questioning what exactly they got for their billions of dollars sent to the US government and treasury for the past 50+ years when the American military couldn't defend a few dozen $5,000 Iranian Shahed drones equipped with a knock-off Honda motorbike engine. 

If the Chinese economy, which has doubled down on EV production, solar and all sorts of other green tech to lead the next 50 years of innovation at the detriment to the rest of the world, how long will they be able to keep it up if American troops are blocking the black stuff which turns the turbines?