COMMENT: whoever wins control of the Straits of Hormuz will control half of China's oil flow

The battle for control of the Strait of Hormuz is underway, one of the most strategically important waterways in the world. Whoever wins will control half of China’s flow of oil.

One unstated objective of Washington’s foreign policy appears to be to get leverage over China’s access to oil. China has a monopoly over US supplies of critical minerals and rare earth metals (REMs). Trump is pushing back with a plan to control as much of China’s access to oil as he can.

This plan emerged as part of Operation Absolute Resolve on January 3, in which the US decapitated the government of Venezuelan President Nicolás Maduro, which has been widely interpreted as an effort to “take control” of oil business, according to US President Donald Trump’s comments end the exports to Beijing. China had been importing the majority of Venezuela’s crude exports, but those have now fallen to zero.

Now the entire might of the US Navy has been deployed to the Persian Gulf since Operation Epic Fury began on February 28. Should the US succeed in toppling the Islamic Republic or significantly weakening its military capabilities, another potential objective would likely be to secure lasting US control over the Strait of Hormuz — and by extension control China’s largest external source of oil.

The stakes are high as currently the US is losing the showdown. As bne IntelliNews reported, Tehran is currently in full control of the straits and has launched an informal permits-for-passage system that allows tankers from “friendly countries” to pass through. So far cargos are travelling exclusively to Asia.

In the first week of the war, Trump suggested that the US navy could restart traffic by a repeat for the Iran-Iraq war’s Operation Earnest Will between 1987–1988, where the US navy escorted pairs of Kuwaiti tankers through the straits to keep the oil flowing. Last week, the US navy said it has declined daily requests from commercial shipping companies for protection as it was “too dangerous to traverse.”

Reportedly, the Pentagon has now ordered the rest of the US navy to converge on the Gulf and there are reports of infantry being transported to the Gulf on the US’ fastest ships in what could be preparations for a ground invasion.

Energy strategist Dr. Thomas O’Donnell argues that control of the strait would give Washington powerful strategic leverage over Beijing.

“The USA will control half of China’s oil imports — about 5.4mn barrels per day — which flow through Hormuz,” O’Donnell said in comments to bne IntelliNews.

That control would not only affect China directly. It would also ensure that the US could guarantee energy flows to its allies in Asia in the event of a wider conflict with Beijing.

“The USA will insure that during any Pacific war China might start that Iran, acting in solidarity with China, could not block oil flows to US Asian allies such as Japan, South Korea, Australia, and the Philippines,” O’Donnell said. He added that Washington would also want to guarantee supplies to other regional economies including Vietnam, Indonesia, Malaysia and Singapore.

What is already emerging from the showdown is that in a post-war scenario, the oil flowing out of the Gulf will become highly politicised with whichever party wins, able to boost or squeeze supplies for geopolitical leverage.

The timing of the confrontation is also significant. Chinese President Xi Jinping has instructed the Chinese military to be ready to take Taiwan by force by 2027, according to analysts’ speculation, a deadline that has sharpened strategic planning in Washington.

“China – and Iran – should hardly be surprised when Washington takes such a declaration seriously and moves decisively to destroy Iran’s capacity to project power in the Persian Gulf,” O’Donnell said. That capability includes Iran’s missile forces, drone fleets and naval mines, all of which could threaten shipping through Hormuz.

From a US strategic perspective, the worst-case scenario would be fighting a war with China in the Pacific while simultaneously having to reopen the Strait of Hormuz if Iran keeps it closed. The current conflict has already drawn off most of the US THAAD radar capacity after Iran destroyed four radar bases in the Middle East, half of the Pentagon’s global inventory, and is shipping them to the Gulf. Likewise, the US allies in the region are already running short of Patriot interceptor missiles after a relentless Iranian barrage at the opening of hostilities. US forces in the Indo-Pacific region have already been seriously depleted without China firing a shot.

“One can only imagine how difficult it would be for the USA if, while responding to Chinese aggression against Taiwan, it also had to divert one or two aircraft carriers to reopen the Strait of Hormuz,” O’Donnell said.

If Washington’s objective is to avoid that scenario, he argues, the logical outcome would be to establish permanent military control over the Straits.

“Indeed, if this is Washington’s concern, it should be expected to finish securing its military control, perpetually, over Hormuz so as to be well prepared for a war with China,” O’Donnell said.