Hormuz Blockade and China

The U.S. blockade in the Strait of Hormuz has turned China and India into immediate stakeholders in Washington’s fight with Iran. (cnbc.com) The blockade began at 10 a.m. Eastern time on Monday, April 13, and U.S. Central Command said by late Tuesday that it had been “fully implemented” with more than 10,000 troops, over a dozen Navy ships and fighter jets in the Gulf of Oman and Arabian Sea. CNBC reported that six merchant vessels were ordered back in the first 24 hours, even as maritime analysts tracked at least two crossings, including a Chinese-owned sanctioned tanker. (cbsnews.com, cnbc.com) China reacted on April 14 through Foreign Ministry spokesperson Guo Jiakun, who called the U.S. move “dangerous and irresponsible” and said it would “exacerbate tensions.” The New York Times reported that the blockade now threatens a mid-May visit by President Donald Trump to China that both sides had treated as a chance to steady ties. (cnbc.com, nytimes.com) The shipping lane at issue is small on a map and huge in the energy system. A March 11 Congressional Research Service report said roughly 27% of the world’s seaborne crude oil and petroleum products and 20% of global liquefied natural gas pass through the strait. (congress.gov, eia.gov) That exposure lands hardest on Asia. CNBC reported that about 98% of Iranian oil exports go to China, while India had resumed purchases of Iranian oil and gas earlier this month after a seven-year break under a temporary U.S. waiver. (cnbc.com) India’s government has not published a new emergency import map this week, but its Petroleum Planning and Analysis Cell updated its import portal on April 10 as refiners faced the same Gulf shipping shock. Prime Minister Narendra Modi said after a roughly 40-minute call with Trump on Tuesday that India supported “de-escalation and restoration of peace at the earliest.” (ppac.gov.in, cnbc.com) The blockade also cuts across a China policy that had been softening only weeks ago. The New York Times said Beijing had avoided direct confrontation over the Iran war at first, but Xi Jinping shifted tone by warning against a return to “the law of the jungle” as the blockade widened the conflict’s economic reach. (nytimes.com) Even with that pressure, China is still finding room to gain elsewhere. A Times of India report, citing research carried by the South China Morning Post, said the United States now has nearly $2 trillion in data-center projects planned or underway, and China remains embedded in the Asian supply chains that feed that buildout through products such as printed circuit boards and server assemblies. (timesofindia.indiatimes.com, scmp.com) China is also looking beyond the Gulf. In The Conversation on April 16, Cobus van Staden wrote that the Iran conflict is likely to speed Beijing’s push toward renewables, electrification and new export markets in Africa as Chinese firms look for growth outside the old energy routes. (theconversation.com) For Washington, that leaves two clocks running at once: a naval operation measured in hours and an Asian realignment measured in months. The longer tanker traffic stays disrupted in Hormuz, the harder it gets to isolate Iran without also reshaping China’s trade, diplomacy and energy strategy. (cnbc.com, cnbc.com, theconversation.com)