China’s next big problem won’t be in the South China Sea. It will be in the Strait of Hormuz.
That’s where both Washington and Teheran want to enforce their own freedom of navigation.
This prospect moves the US and Iran closer to a direct military confrontation. If that turns out to be the case, it will disrupt Middle East oil supplies and push crude oil prices above $100 level.
That could be bad news for China – because the Middle East supplies close to 50% of China’s oil imports.
It could be good news for American frackers, who will have to pump oil as fast as they can to make up any supply shortfall to America’s allies.
It could be good for Russia, which will have to sell more oil to its own allies, including China.
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WNU editor: Oil has always been China's Achilles Heel, and if there is one thing that will put a screeching stop to China's economy it will be $100+ for a barrel of oil.
A clash between the US and Iran in the straits would send prices above $200/bbl, perhaps higher. China would be displeased. China will calm Iran and force it to behave.
ReplyDeleteChina has an awful lot to lose on the world stage these days...
ReplyDeleteI don't believe the oil price will be that's high, but I strongly believe that's the "Oil Road" will be more important than the "Silk Road". It would be a struggle for China as it was.......for Japan before "Tora Tora Tora".
ReplyDeleteHahaha China tries to play with the big boys, but now it's for everyone to see how weak they are..
ReplyDeleteThe trouble for China will not be losing this war (they have lost it already, it's over), BUT, how to tell your population this? Keep in mind, for nearly 2 decades, the Chinese party has portrayed themselves as invincible in everything they (and by extension China) does. Such a massive failure will not go unnoticed. Trillions have already been wiped out in China. On top, the news are slowly breaking (it has been reported here before) that China's GDP is faked by up to 30%! And what are they gonna do with the tens of thousands (not thousands, TENS of thousands) of empty sky scrapers that are slowly rotting and becoming a safety hazard all over China? These things need to be torn down.. and cameras will need to be forbidden, because think of the optics when this leaks out... the Chinese housing market was always a concern to investors, once the videos come through omg