security should be built on domestic strength, specifically by securing our power grid and reducing global oil dependence. We have the technology, tools, solar, wind, advanced battery storage, nuclear power to make this happen.
We have the wrong people in place to make this happen.
> “The main message is that we’re going to get the energy transition forced on us in a very painful way that’s going to happen very quickly.
This forcing function will occur regardless of who is in power. The world (China, mostly) produces enough EVs, solar, and batteries to make it happen, it’s just a matter of economics and time.
The people in charge today are temporary, the investments made in clean tech today will last decades.
I think that Trump has given Iran effective tactical control over 20% of the world's energy supply. It's highly likely that they will use this to get their country back on it's economic feet, definitely get the nuclear program finished, and force the end of the PetroDollar in the process.
The appetite for the "boots on the ground" among the US public is almost zero. I doubt that even a large false flag would work at this point.
The hardest part of Trump's 2 week war is going to be the first six years.
It's not just about Iran, it's about exposing the effectiveness of asymmetric war.
You can outgun by far your opponents, and yet they can find cheap and effective ways to make you bleed in ways you cannot sustain for long.
This was already visible in Ukraine, where minor investments on Ukrainian side (like sabotaging gas pipelines, oil refineries or production plants) can lead to magnitude of orders outsized impacts on the war economy (and economy in general) for years.
Now Iran's showing how gargantuan has to be the US' and Israeli effort to prevent a major and long lasting choke on world economy that can be threatened by few dudes with a handful of drones/divers or small boats.
> the "normie" world has seen just how much power Iran actually has
The weird thing is practically every strategist has known this since the 1980s. Iran's geography means as long as it controls its Gulf-coast border, it can control the Strait.
Might not be ignorance. There's still the strong possibility that "blackmail material" is floating around due to the island of one of Trumps old friends.
Yes. Unfortunately for majority of voters, unless it impacts them directly they won't believe it.
I hope countries (or rather, voters) around the world are waking up to just how helplessly dependent they are on a resource they do not own and have to beg and scrape from others.
The USA is a net exporter so technically if export restrictions are put up the Americans will likely be fine. The rest of the world, not so much. I live in Japan and I'm definitely worried about the rest of the year.
> technically if export restrictions are put up the Americans will likely be fine
Technically no. The oil we export isn’t a fit for the oil we refine. We’re slaved to the global market, though our exports do give us a tool. (Unfortunately, it requires taxing oil production (since we can’t tax exports [1]) to pay for, ideally, a monthly cheque to every American, and less ideally, a refiner credit to push down domestic gas prices.
Pakistan is a slam dunk for renewables, it's ground swell and up there given the lack of decent state level delivery infrastructure.
It's a similar story across much of the developed world, easy to build out renewables from the ground up and good deals from China for countries of interest to the Belt and Road intititives.
In Australia:
73% support renewables and batteries as the fastest way to lower people's power bills, compared to just 16% for nuclear reactors and 8% for new coal power
and
In 2018, 84% of Australians said the government should focus on renewables, even if we need to invest more in infrastructure to make the system more reliable.
are typical bites from leading poll agencies.
In the USofA ... dunno, that's more your sandbox - I suspect many hearts and minds have been captured by 50 years of the Koch Bros dunking on AGW and public transport leading to a broad excess of rolling coal types being mind tweakled by the Heritage Foundation and / or Taylor Sheridans Landman windmill rants, etc.
tbf I think the 'normie' world already believed that given that the president currently in charge ... campaigned on avoiding more wars. Not that anything makes a lot of sense these days but I still remember the atmosphere around the Iraq war when you had the 'freedom fries' and 'if you're not with us you're against us', rhetoric.
Now there seems to be virtually no patriotic sentiment except for the face-keeping from officials and some hardcore supporters who just repeat anything. But many Americans seem utterly confused.
At least we know what was the topic of conversation between Trump and Putin in the presidential limousine in Alaska. "Vlad tell me more about that concept of special operation". At that point western world was still deluded it's some kind of sophisticated strategy to resolve the conflict in Ukraine.
> Indeed, for filling their ~1.3B barrel strategic reserve
That's 117 days, or four months, of imports [1]. Half of Hormuz-transiting oil ends up in China [2]. So even if China fully substitutes lost imports with reserves, that's not even taking them through the end of the year. (And China running down its reserves is a strategic win for America. It means they aren't available to buffer a blockade of the Straits of Malacca.)
I don't even know of a credible economist in China arguing China is insulated from this shock.
PRC coal to petchem is like 3mbd equivalent (growing at 500k mbd per year), profitable vs oil at $80, ergo about 3/5 of their industrial feedstock inputs just got massive 50% and growing discount vs everyone else. Plastics, synthetics, fertilizer... everything PRC now has structural 50% discount.
For actual Hormuz, PRC gets 6/12mbd. They really only need ~8m for domestic use, other 4m is discretionary, i.e. reselling refined petro/petchem or heating, stuff which can be forgone without degrading domestic operations or rapidly electrified. So really PRC only dealing with 2mbd import shortfall if Hormuz fully closed, their SPR will stretch for couple years at current runway if they just forgo discretionary oil use, and by the time it empties, if PRC goes ham on domestic EV / freight at current adoption, with active coal to X in pipeline, they can displace another that 2m barrels. Only way for PRC SPR to run dry end of year is if US starts blockading Malacca tomorrow and glass pipelines. Otherwise PRC on trend to survive with massive advantage vs everyone else.
Energy geopolitics to consider is unless Hormuz shuts down completely by Iran (or US), PRC gets first dibs on energy products by default, all existing contracts are going to be force majeured, and only way any GCC producer is going to make money is by selling to PRC first if Iran serious and can enforce petro-yuan. Also with 20% energy mix from oil vs 40% from US, and electric freight options for logistics, PRC simply better setup to weather high energy prices and disruptions. Their coal petchem stack = they are now permanently cheaper than all other (oil/naphtha based) industrial competitors who bluntly can't even pull the overproduction card vs PRC because their production will crater from lack of of inputs creating condition to reinforce PRC as primary global producer. No one can outproduce PRC in high oil scenario because no one has PRC price stable coal to liquid/chemical stack that serves as energy fortress that decouples most of PRC economy/industry from oil prices. TLDR, PRC is relatively derisked from Hormuz already, if US wants to actually snowball oil disruption into advantage vs PRC, they need to start war with PRC right now. Otherwise sustained high oil price going to be net positive for PRC vs basically everyone else.
> which can be forgone without degrading domestic operations or rapidly electrified
I've heard this line from geopolitical analysts, mostly outside China. And then I hear from economists and traders in China, or look at its stock market [1], and see them preparing for a shock. A shock that's been softened by Beijing's policies. But not eliminated.
> unless Hormuz shuts down completely by Iran (or US), PRC gets first dibs on energy products by default
This is far from certain. Right now, Iran has a veto on Hormuz traffic and is throttling it, including for China-bound traffic. Long term, I think we realise every Hormuz neighbour has an off switch. Why a waning customer would get "first dibs...by default" will require more explanation from you.
> sustained high oil price going to be net positive for PRC vs basically everyone else
I'm not seeing it. Inputs going up in price is still worse than not. Russia is winning. Non-Gulf oil exporters are winning. And China is relatively winning within Asia. But globally, it's still weaning a risk that's been known for decades.
Shutting down on subsectors of petchem with i.e. forgoing $30-80 margin per barrel of refined crude, around 1-2mbd, which is... not nothing but fraction vs US cost to sustain war to deny those barrels - think ~50b per year isolated to discretionary SOE petchem vs 200b war supplemental. The important point is they don't have to actually sacrifice barrels for broader industry with petchem inputs. A few energy SOEs twiddling thumbs is completely different level of exposure vs others who may have to shut down production lines due to lack of oil/petchem where each barrel translates to significantly higher margins on intermediary/finished goods. Those are not discretionary.
>But not eliminated
Of course not eliminated, there will be adjustment pains/friction to unprecedented changes, but PRC stock market has always been dud performer/casino (despite gov attempts to reform) and not indicative of actual industrial performance.
>Why a waning customer
Because PRC is not going to be waning customer. PRC wants no oil dependance for itself =/= PRC stop buying oil. Reminder PRC is the worlds largest oil refiner by capacity, bigger than US. As PRC electrifies and oil demand diminishes, they are not going to let those expensive assets deprecate when they could be value producing. PRC will continue to buy massive amounts of oil to sell refined oil products to others, i.e. pocket that 50b+ per year which could be 250b per year if domestic oil is displaced and refineries only need to export.
What PRC wants post domestic oil, is to continue importing massive amounts of crude so world will import massive amount of surplus petro products from PRC... That's partly why PRC SPR is so big, that 1.4b in peacetime was used to influence global oil prices by manipulating supply... but if Iran is handing PRC petro-yuan on platter then that is even better control. GCC petro states are not going to shut off their exports that literally funds everything, they need export proceeds to survive, and if PRC via Iran has chokehold on what oil goes out, then they going to prioritize selling to PRC. This not even considering they need PRC goods/intermediate goods to survive.
>Inputs going up in price is still worse than not.
Inputs going up for EVERYONE ELSE disproportionately is better than not, because this is massive net relative advantage for PRC. CTO barrels subsidizing 2/3 of industrial (~5mbd) with 50% inputs than everyone else is insane competitive advantage. Sure, none GCC producers are winning the resource export game. High oils prices which PRC industry is insulated from = PRC is going to STOMP other industrial producers and win in manufacturing export game (even harder). If PRC plays along with Iran petro-yuan / tollbooth game, who knows they can even scale up discounted crude to refined export complex, i.e. they will also parasitically win the resource export game being reseller. PRC scraping extra margins off below benchmark price which others will have to pay (assuming they're even allowed) is MUCH stronger position than PRC original plan to have legacy refinery operate off benchmark price. This part key, arbitrating Iranian petro-yuan / gating export access = higher oil prices for everyone else = PRC coal to petchem AND crude to petchem are BOTH going to profit disproportionately. This doesn't mean PRC doesn't also pay high prices, but others simply paying highER creates market clearing conditions that will liquidate competitors who are structurally uncompetitive paying benchmark.
> few energy SOEs twiddling thumbs is completely different level of exposure vs others who may have to shut down production lines
Sure. Again, I'm not saying China isn't better off than anyone else in Asia. But "few energy SOEs twiddling thumbs" is economic damage. Enough to have spooked traders and policymakers in China.
> Reminder PRC is the worlds largest oil refiner by capacity
Good point. Conceded.
> Inputs going up for EVERYONE ELSE disproportionately is better than not, because this is massive net relative advantage for PRC
Again, in Asia. Yes. Globally, they're still facing a slowdown in growth. Emerging stronger after a recession doesn't make a recession fun (or risk free).
Like, take away direct war costs and it's genuinely ambiguous how an oil shock hits the U.S. market right now. We have enough production, and enough refining with enough of a global crack spread, that the hits to consumption almost even out. Almost. Still hurts. But not as much as before. (And, granted, not as much as China has been able to mitigate downside.)
(I agree there will be some pain, but argue that China has sufficiently prepared for a fossil supply chain disruption of this magnitude, while also having the industrial state capacity to achieve a more favorable long term trajectory; they are deploying ~400GW+ of renewables annually at current deployment rates)
> argue that China has sufficiently prepared for a fossil supply chain disruption of this magnitude
Where we agree is in China having massively reduced the impact of this shock. (And, probably, in them succeeding in insulating themselves completely within a generation.)
Where we don't is in this still being a stagflationary hit to China and, probably, a worse economic hit to them than it will be to us.
Put more succinctly, the first and second derivatives are massively favourable. But the actual level still produces lots of vulnerability. China will be better off than its neighbours. But it's still going to get screwed even if the war ends tomorrow, which it isn't.
The most charitable explanation is that they are concerned about their own privacy or identifiability,Bl but ultimately it is a Dick Move™ to other participants.
It's the kind of late-edit things that spurs me to include quotes in replies.
> highly likely that they will use this to get their country back on it's economic feet, definitely get the nuclear program finished
Yes on feet. No on nuclear. Iran's economy, for the near term, is trashed. It's going to need to choose between sovereighty and wealth. If it chooses the formewr, it lacks the resources to complete the project. If it chooses the latter, it probably goes with China, which means its nuclear programme will be constrained.
> force the end of the PetroDollar in the process
Sigh. Petrodollar hypothesis hasn't been a thing for decades. Various countries price and settle oil in currencies other than dollars. Dollar demand due to oil is a vanishing fraction of total international dollar demand. Like, oil could swap to being entirely traded in Bitcoin and it might make the next Fed meeting's agenda.
80% of oil trade in 2023 in dollars. Mostly importantly, the gulf states do in exchange for US security guarantees, which Trump just blew up in spectacular fashion.
Decades of Middle Eastern policy have just been undone because of the US half-committing to this war.
Compare oil trading as a fraction of dollar volumes in the 1970s, when petrodollar was a thing, to today. Also, the JPMorgan Chase estimate is almost certainly too high for dollar volumes in oil trading–I sat on a desk in Connecticut almost two decades ago and we traded oil settled for in sterling.
> gulf states do in exchange for US security guarantees
This is still 1970s geopolitics. The Gulf states get U.S. security guarantees in exchange for basing, foreign policy suzerainty, et cetera. We don't need Gulf money to finance our deficit anymore. (See: your article re. the UAE.)
Petrodollar is a fun thing to talk about. But it hasn't had explanatory or policy value since the Cold War. American consumption and capital markets drive global dollar demand. The petrodollar, if it has any use, is as a Big Mac index for general dollar use. It's a signal, not a driver.
I think the main importance of the "Petroyuan" is simply sanctions evasion. The US claims jurisdiction over all dollar transactions, so countries need to use something else.
> the main importance of the "Petroyuan" is simply sanctions evasion. The US claims jurisdiction over all dollar transactions, so countries need to use something else
Correct. And I'm not saying tracking in what currency different commodities are settled isn't important. But it's as a signal of financial and trade flows. Not an end in itself. It was an end in itself in the 1970s, with the petrodollar and–far-more important to America–petrodollar recycling.
Dollar hegemony is built on American consumption, first, and capital markets, second. The power of the renmimbi rests in Beijing's production power.
The petrodollar thing isn't about spreading the US dollar. The US military is the world's biggest consumer of oil and has bases all around the world. US military strength depends on the ability to acquire oil at favorable terms and the best way to do that is by paying in USD. Countries that trade oil in USD are implicitly economic allies of the US military. You could think of oil as a weapon here.
> It's going to need to choose between sovereighty and wealth.
I don't follow this at all? Is there some implication that selling oil to China is constraining sovereignty? Is there some nuclear deal between Iran and China I'm not aware of?
As an autocratic regime, they (IRGC) have no choice but to pursue not only sovereignty but domestic control.
> Petrodollar hypothesis hasn't been a thing for decades
Yeah, this has always seemed overstated. However it circulates in exactly the kind of rightwing paranoia circles which strongly influence the current US government.
> Is there some implication that selling oil to China is constraining sovereignty?
China helping Iran rebuild means China getting more say in Tehran than they have right now. And to date, nuclear non-proliferation has been a serious issue for Beijing. I can't see China being thrilled about a new nuclear power one country away.
> it circulates in exactly the kind of rightwing paranoia circles which strongly influence the current US government
When did it make the jump from the far left to the far right?
security should be built on domestic strength, specifically by securing our power grid and reducing global oil dependence. We have the technology, tools, solar, wind, advanced battery storage, nuclear power to make this happen. We have the wrong people in place to make this happen.
Progress in this field will be slower than science. Funerals will help but too many people make money by holding us back.
> “The main message is that we’re going to get the energy transition forced on us in a very painful way that’s going to happen very quickly.
This forcing function will occur regardless of who is in power. The world (China, mostly) produces enough EVs, solar, and batteries to make it happen, it’s just a matter of economics and time.
The people in charge today are temporary, the investments made in clean tech today will last decades.
https://ember-energy.org/data/china-cleantech-exports-data-e...
(China is ~1/3 of global manufacturing capacity)
> the investments made in clean tech today will last decades.
As, I suspect, will the damage to the civil service and the scientific community.
The unraveling of the PetroDollar is happening. Japan jut agreed to pay Yuan for Iranian oil now. They were already using Yuan for Russian Oil.
I'd like some credible source for the Japan claim, please. Per https://www.jluggage.com/blog/fact-check/japan-buying-oil-in... it is a rumour.
> The unraveling of the PetroDollar is happening.
Suppose that is true. Would it matter?
Oil is rarely traded in Euros but the Euro is still a strong currency.
I think that Trump has given Iran effective tactical control over 20% of the world's energy supply. It's highly likely that they will use this to get their country back on it's economic feet, definitely get the nuclear program finished, and force the end of the PetroDollar in the process.
The appetite for the "boots on the ground" among the US public is almost zero. I doubt that even a large false flag would work at this point.
The hardest part of Trump's 2 week war is going to be the first six years.
In a span of weeks, the "normie" world has seen just how much power Iran actually has.
It's not just about Iran, it's about exposing the effectiveness of asymmetric war.
You can outgun by far your opponents, and yet they can find cheap and effective ways to make you bleed in ways you cannot sustain for long.
This was already visible in Ukraine, where minor investments on Ukrainian side (like sabotaging gas pipelines, oil refineries or production plants) can lead to magnitude of orders outsized impacts on the war economy (and economy in general) for years.
Now Iran's showing how gargantuan has to be the US' and Israeli effort to prevent a major and long lasting choke on world economy that can be threatened by few dudes with a handful of drones/divers or small boats.
> the "normie" world has seen just how much power Iran actually has
The weird thing is practically every strategist has known this since the 1980s. Iran's geography means as long as it controls its Gulf-coast border, it can control the Strait.
This is part of why it took over 40 years for Israel to finally find a U.S. president ignorant enough to pull something like this.
> ignorant enough
Might not be ignorance. There's still the strong possibility that "blackmail material" is floating around due to the island of one of Trumps old friends.
Also, let us never forget that the Epstein class are extremely skilled, and experienced, in making money off of things going to shit.
Yes. Unfortunately for majority of voters, unless it impacts them directly they won't believe it.
I hope countries (or rather, voters) around the world are waking up to just how helplessly dependent they are on a resource they do not own and have to beg and scrape from others.
> unless it impacts them directly they won't believe it.
They may end up believing they are being impacted, but many will still deny or argue the root cause.
The USA is a net exporter so technically if export restrictions are put up the Americans will likely be fine. The rest of the world, not so much. I live in Japan and I'm definitely worried about the rest of the year.
> technically if export restrictions are put up the Americans will likely be fine
Technically no. The oil we export isn’t a fit for the oil we refine. We’re slaved to the global market, though our exports do give us a tool. (Unfortunately, it requires taxing oil production (since we can’t tax exports [1]) to pay for, ideally, a monthly cheque to every American, and less ideally, a refiner credit to push down domestic gas prices.
[1] https://constitution.congress.gov/browse/essay/artI-S9-C5-1/...
Do we have evidence of polls moving in favour of renewables?
Sure.
Pakistan is a slam dunk for renewables, it's ground swell and up there given the lack of decent state level delivery infrastructure.
It's a similar story across much of the developed world, easy to build out renewables from the ground up and good deals from China for countries of interest to the Belt and Road intititives.
In Australia:
and are typical bites from leading poll agencies.In the USofA ... dunno, that's more your sandbox - I suspect many hearts and minds have been captured by 50 years of the Koch Bros dunking on AGW and public transport leading to a broad excess of rolling coal types being mind tweakled by the Heritage Foundation and / or Taylor Sheridans Landman windmill rants, etc.
tbf I think the 'normie' world already believed that given that the president currently in charge ... campaigned on avoiding more wars. Not that anything makes a lot of sense these days but I still remember the atmosphere around the Iraq war when you had the 'freedom fries' and 'if you're not with us you're against us', rhetoric.
Now there seems to be virtually no patriotic sentiment except for the face-keeping from officials and some hardcore supporters who just repeat anything. But many Americans seem utterly confused.
For the record, Bush the 2nd also campaigned on non interventionism.
>But many Americans seem utterly confused.
Isn't that part of the plan.
At least we know what was the topic of conversation between Trump and Putin in the presidential limousine in Alaska. "Vlad tell me more about that concept of special operation". At that point western world was still deluded it's some kind of sophisticated strategy to resolve the conflict in Ukraine.
I just hope that what is going on in Iran and Ukraine will make China think twice before going into Taiwan.
[flagged]
China has planned for and is insulated from petroleum supply chain disruption.
https://www.theguardian.com/world/2026/mar/20/china-oil-rese...
> China has planned for and is insulated from petroleum supply chain disruption
Planned for, yes. Insulated, no. China remains the world's largest importer of crude [1].
[1] https://www.worldstopexports.com/crude-oil-imports-by-countr...
Indeed, imports are for filling their ~1.3B barrel strategic reserve at favorable sanctioned priced imports.
https://www.reuters.com/business/energy/china-targets-steady...
https://en.wikipedia.org/wiki/Strategic_petroleum_reserve_(C...
> Indeed, for filling their ~1.3B barrel strategic reserve
That's 117 days, or four months, of imports [1]. Half of Hormuz-transiting oil ends up in China [2]. So even if China fully substitutes lost imports with reserves, that's not even taking them through the end of the year. (And China running down its reserves is a strategic win for America. It means they aren't available to buffer a blockade of the Straits of Malacca.)
I don't even know of a credible economist in China arguing China is insulated from this shock.
[1] https://www.eia.gov/todayinenergy/detail.php?id=64544#:~:tex...
[2] https://www.visualcapitalist.com/charted-oil-trade-through-t...
PRC coal to petchem is like 3mbd equivalent (growing at 500k mbd per year), profitable vs oil at $80, ergo about 3/5 of their industrial feedstock inputs just got massive 50% and growing discount vs everyone else. Plastics, synthetics, fertilizer... everything PRC now has structural 50% discount.
For actual Hormuz, PRC gets 6/12mbd. They really only need ~8m for domestic use, other 4m is discretionary, i.e. reselling refined petro/petchem or heating, stuff which can be forgone without degrading domestic operations or rapidly electrified. So really PRC only dealing with 2mbd import shortfall if Hormuz fully closed, their SPR will stretch for couple years at current runway if they just forgo discretionary oil use, and by the time it empties, if PRC goes ham on domestic EV / freight at current adoption, with active coal to X in pipeline, they can displace another that 2m barrels. Only way for PRC SPR to run dry end of year is if US starts blockading Malacca tomorrow and glass pipelines. Otherwise PRC on trend to survive with massive advantage vs everyone else.
Energy geopolitics to consider is unless Hormuz shuts down completely by Iran (or US), PRC gets first dibs on energy products by default, all existing contracts are going to be force majeured, and only way any GCC producer is going to make money is by selling to PRC first if Iran serious and can enforce petro-yuan. Also with 20% energy mix from oil vs 40% from US, and electric freight options for logistics, PRC simply better setup to weather high energy prices and disruptions. Their coal petchem stack = they are now permanently cheaper than all other (oil/naphtha based) industrial competitors who bluntly can't even pull the overproduction card vs PRC because their production will crater from lack of of inputs creating condition to reinforce PRC as primary global producer. No one can outproduce PRC in high oil scenario because no one has PRC price stable coal to liquid/chemical stack that serves as energy fortress that decouples most of PRC economy/industry from oil prices. TLDR, PRC is relatively derisked from Hormuz already, if US wants to actually snowball oil disruption into advantage vs PRC, they need to start war with PRC right now. Otherwise sustained high oil price going to be net positive for PRC vs basically everyone else.
> if they just forgo discretionary oil use
You're describing economic damage.
> which can be forgone without degrading domestic operations or rapidly electrified
I've heard this line from geopolitical analysts, mostly outside China. And then I hear from economists and traders in China, or look at its stock market [1], and see them preparing for a shock. A shock that's been softened by Beijing's policies. But not eliminated.
> unless Hormuz shuts down completely by Iran (or US), PRC gets first dibs on energy products by default
This is far from certain. Right now, Iran has a veto on Hormuz traffic and is throttling it, including for China-bound traffic. Long term, I think we realise every Hormuz neighbour has an off switch. Why a waning customer would get "first dibs...by default" will require more explanation from you.
> sustained high oil price going to be net positive for PRC vs basically everyone else
I'm not seeing it. Inputs going up in price is still worse than not. Russia is winning. Non-Gulf oil exporters are winning. And China is relatively winning within Asia. But globally, it's still weaning a risk that's been known for decades.
[1] https://tradingeconomics.com/china/stock-market
>economic damage
Shutting down on subsectors of petchem with i.e. forgoing $30-80 margin per barrel of refined crude, around 1-2mbd, which is... not nothing but fraction vs US cost to sustain war to deny those barrels - think ~50b per year isolated to discretionary SOE petchem vs 200b war supplemental. The important point is they don't have to actually sacrifice barrels for broader industry with petchem inputs. A few energy SOEs twiddling thumbs is completely different level of exposure vs others who may have to shut down production lines due to lack of oil/petchem where each barrel translates to significantly higher margins on intermediary/finished goods. Those are not discretionary.
>But not eliminated
Of course not eliminated, there will be adjustment pains/friction to unprecedented changes, but PRC stock market has always been dud performer/casino (despite gov attempts to reform) and not indicative of actual industrial performance.
>Why a waning customer
Because PRC is not going to be waning customer. PRC wants no oil dependance for itself =/= PRC stop buying oil. Reminder PRC is the worlds largest oil refiner by capacity, bigger than US. As PRC electrifies and oil demand diminishes, they are not going to let those expensive assets deprecate when they could be value producing. PRC will continue to buy massive amounts of oil to sell refined oil products to others, i.e. pocket that 50b+ per year which could be 250b per year if domestic oil is displaced and refineries only need to export.
What PRC wants post domestic oil, is to continue importing massive amounts of crude so world will import massive amount of surplus petro products from PRC... That's partly why PRC SPR is so big, that 1.4b in peacetime was used to influence global oil prices by manipulating supply... but if Iran is handing PRC petro-yuan on platter then that is even better control. GCC petro states are not going to shut off their exports that literally funds everything, they need export proceeds to survive, and if PRC via Iran has chokehold on what oil goes out, then they going to prioritize selling to PRC. This not even considering they need PRC goods/intermediate goods to survive.
>Inputs going up in price is still worse than not.
Inputs going up for EVERYONE ELSE disproportionately is better than not, because this is massive net relative advantage for PRC. CTO barrels subsidizing 2/3 of industrial (~5mbd) with 50% inputs than everyone else is insane competitive advantage. Sure, none GCC producers are winning the resource export game. High oils prices which PRC industry is insulated from = PRC is going to STOMP other industrial producers and win in manufacturing export game (even harder). If PRC plays along with Iran petro-yuan / tollbooth game, who knows they can even scale up discounted crude to refined export complex, i.e. they will also parasitically win the resource export game being reseller. PRC scraping extra margins off below benchmark price which others will have to pay (assuming they're even allowed) is MUCH stronger position than PRC original plan to have legacy refinery operate off benchmark price. This part key, arbitrating Iranian petro-yuan / gating export access = higher oil prices for everyone else = PRC coal to petchem AND crude to petchem are BOTH going to profit disproportionately. This doesn't mean PRC doesn't also pay high prices, but others simply paying highER creates market clearing conditions that will liquidate competitors who are structurally uncompetitive paying benchmark.
> few energy SOEs twiddling thumbs is completely different level of exposure vs others who may have to shut down production lines
Sure. Again, I'm not saying China isn't better off than anyone else in Asia. But "few energy SOEs twiddling thumbs" is economic damage. Enough to have spooked traders and policymakers in China.
> Reminder PRC is the worlds largest oil refiner by capacity
Good point. Conceded.
> Inputs going up for EVERYONE ELSE disproportionately is better than not, because this is massive net relative advantage for PRC
Again, in Asia. Yes. Globally, they're still facing a slowdown in growth. Emerging stronger after a recession doesn't make a recession fun (or risk free).
Like, take away direct war costs and it's genuinely ambiguous how an oil shock hits the U.S. market right now. We have enough production, and enough refining with enough of a global crack spread, that the hits to consumption almost even out. Almost. Still hurts. But not as much as before. (And, granted, not as much as China has been able to mitigate downside.)
China’s Edge in an Oil Shock: Electric Cars and Renewables - https://www.nytimes.com/2026/03/14/business/china-oil-cars.h... | https://archive.today/UBP8L - March 16th, 2026
Implications of the Conflict in the Middle East for China’s Energy Security - https://www.energypolicy.columbia.edu/implications-of-the-co... - March 4th, 2026
Ember Energy: China - https://ember-energy.org/countries-and-regions/china/ - February 2026
China’s LNG imports were dropping before this crisis.
China’s LNG imports fell 12% in 2025 despite remaining world’s top buyer - https://www.icis.com/explore/resources/news/2025/12/30/11168... - December 30th, 2025
(I agree there will be some pain, but argue that China has sufficiently prepared for a fossil supply chain disruption of this magnitude, while also having the industrial state capacity to achieve a more favorable long term trajectory; they are deploying ~400GW+ of renewables annually at current deployment rates)
> argue that China has sufficiently prepared for a fossil supply chain disruption of this magnitude
Where we agree is in China having massively reduced the impact of this shock. (And, probably, in them succeeding in insulating themselves completely within a generation.)
Where we don't is in this still being a stagflationary hit to China and, probably, a worse economic hit to them than it will be to us.
Put more succinctly, the first and second derivatives are massively favourable. But the actual level still produces lots of vulnerability. China will be better off than its neighbours. But it's still going to get screwed even if the war ends tomorrow, which it isn't.
This user keeps creating new accounts, getting downvoted, and replacing the content of their comments with a period. Why???
The most charitable explanation is that they are concerned about their own privacy or identifiability,Bl but ultimately it is a Dick Move™ to other participants.
It's the kind of late-edit things that spurs me to include quotes in replies.
> highly likely that they will use this to get their country back on it's economic feet, definitely get the nuclear program finished
Yes on feet. No on nuclear. Iran's economy, for the near term, is trashed. It's going to need to choose between sovereighty and wealth. If it chooses the formewr, it lacks the resources to complete the project. If it chooses the latter, it probably goes with China, which means its nuclear programme will be constrained.
> force the end of the PetroDollar in the process
Sigh. Petrodollar hypothesis hasn't been a thing for decades. Various countries price and settle oil in currencies other than dollars. Dollar demand due to oil is a vanishing fraction of total international dollar demand. Like, oil could swap to being entirely traded in Bitcoin and it might make the next Fed meeting's agenda.
>Petrodollar hypothesis hasn't been a thing for decades.
https://www.wsj.com/finance/currencies/the-dominant-dollar-f...
80% of oil trade in 2023 in dollars. Mostly importantly, the gulf states do in exchange for US security guarantees, which Trump just blew up in spectacular fashion. Decades of Middle Eastern policy have just been undone because of the US half-committing to this war.
> 80% of oil trade in 2023 in dollars
Compare oil trading as a fraction of dollar volumes in the 1970s, when petrodollar was a thing, to today. Also, the JPMorgan Chase estimate is almost certainly too high for dollar volumes in oil trading–I sat on a desk in Connecticut almost two decades ago and we traded oil settled for in sterling.
> gulf states do in exchange for US security guarantees
This is still 1970s geopolitics. The Gulf states get U.S. security guarantees in exchange for basing, foreign policy suzerainty, et cetera. We don't need Gulf money to finance our deficit anymore. (See: your article re. the UAE.)
Petrodollar is a fun thing to talk about. But it hasn't had explanatory or policy value since the Cold War. American consumption and capital markets drive global dollar demand. The petrodollar, if it has any use, is as a Big Mac index for general dollar use. It's a signal, not a driver.
There's still a bit of this going on with other countries, such as the UK-Qatar deal which clearly mentions inward investment as a motivator: https://ukdefencejournal.org.uk/uk-qatar-deepen-defence-ties...
(not a "petro pound" though!)
I think the main importance of the "Petroyuan" is simply sanctions evasion. The US claims jurisdiction over all dollar transactions, so countries need to use something else.
> the main importance of the "Petroyuan" is simply sanctions evasion. The US claims jurisdiction over all dollar transactions, so countries need to use something else
Correct. And I'm not saying tracking in what currency different commodities are settled isn't important. But it's as a signal of financial and trade flows. Not an end in itself. It was an end in itself in the 1970s, with the petrodollar and–far-more important to America–petrodollar recycling.
Dollar hegemony is built on American consumption, first, and capital markets, second. The power of the renmimbi rests in Beijing's production power.
The petrodollar thing isn't about spreading the US dollar. The US military is the world's biggest consumer of oil and has bases all around the world. US military strength depends on the ability to acquire oil at favorable terms and the best way to do that is by paying in USD. Countries that trade oil in USD are implicitly economic allies of the US military. You could think of oil as a weapon here.
> It's going to need to choose between sovereighty and wealth.
I don't follow this at all? Is there some implication that selling oil to China is constraining sovereignty? Is there some nuclear deal between Iran and China I'm not aware of?
As an autocratic regime, they (IRGC) have no choice but to pursue not only sovereignty but domestic control.
> Petrodollar hypothesis hasn't been a thing for decades
Yeah, this has always seemed overstated. However it circulates in exactly the kind of rightwing paranoia circles which strongly influence the current US government.
> Is there some implication that selling oil to China is constraining sovereignty?
China helping Iran rebuild means China getting more say in Tehran than they have right now. And to date, nuclear non-proliferation has been a serious issue for Beijing. I can't see China being thrilled about a new nuclear power one country away.
> it circulates in exactly the kind of rightwing paranoia circles which strongly influence the current US government
When did it make the jump from the far left to the far right?
You could also say that US finally finished with subsidizing Europe's and other allies lavish lifestyle... (via cheap oil and open trade routes).
No more cheap vacations abroad, cheap food, cheap goods from far away..
I bet we will see $400 oil...
https://archive.ph/jfdlP
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Has anyone said thank you to Trump yet?
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A very un-nice sentiment which explains a lot about modern America if its fueling the GOP.