China has long braced for a Gulf oil supply shock – but the Iran war’s disruption of a key global shipping route is now putting its resilience to the test.
Energy shipments from the Middle East have been at a standstill following Iran’s threats to attack vessels that pass through a critical trade waterway as retaliation against US-Israeli strikes.
The blockade has led to a global oil shortage which has rocked Gulf-reliant Asian countries hard – with the Philippines mandating four-day work weeks to save fuel, and Indonesia seeking ways to avoid burning through reserves that will last just weeks.
China, the world’s largest buyer of oil, is also feeling the strain.
But the country sits in a better position than its neighbours, after years of statecraft that have prepared it for a global energy crisis.
The world economy has been thrown into turbulence since the US and Israel launched strikes against Iran in late February.
Since then, oil prices have at points soared to close to $120 (£90) a barrel – pushed up by strikes on shipping and energy infrastructure and the effective closure of the Strait of Hormuz, the world’s busiest oil shipping channel.
About a fifth of the world’s oil passes through the strait – around 20 million barrels each day, according to estimates from the US Energy Information Administration (EIA).
The shortage has left countries scrambling for alternative crude suppliers outside of the Gulf, while others are tapping into their own oil reserves.
Meanwhile, The US central bank has voted to hold interest rates steady again, as a spike in oil prices since the start of the US-Israel war with Iran raises economic uncertainty and threatens to drive up inflation.Despite pressure from US President Donald Trump to slash borrowing costs, policymakers have been moving cautiously, as they face a tricky combination of rising prices and mixed signals from the job market.
China has long braced for a Gulf oil supply shock – but the Iran war’s disruption of a key global shipping route is now putting its resilience to the test.
Energy shipments from the Middle East have been at a standstill following Iran’s threats to attack vessels that pass through a critical trade waterway as retaliation against US-Israeli strikes.
The blockade has led to a global oil shortage which has rocked Gulf-reliant Asian countries hard – with the Philippines mandating four-day work weeks to save fuel, and Indonesia seeking ways to avoid burning through reserves that will last just weeks.
China, the world’s largest buyer of oil, is also feeling the strain.
But the country sits in a better position than its neighbours, after years of statecraft that have prepared it for a global energy crisis.
The world economy has been thrown into turbulence since the US and Israel launched strikes against Iran in late February.
Since then, oil prices have at points soared to close to $120 (£90) a barrel – pushed up by strikes on shipping and energy infrastructure and the effective closure of the Strait of Hormuz, the world’s busiest oil shipping channel.
About a fifth of the world’s oil passes through the strait – around 20 million barrels each day, according to estimates from the US Energy Information Administration (EIA).
The shortage has left countries scrambling for alternative crude suppliers outside of the Gulf, while others are tapping into their own oil reserves.
Meanwhile, The US central bank has voted to hold interest rates steady again, as a spike in oil prices since the start of the US-Israel war with Iran raises economic uncertainty and threatens to drive up inflation.Despite pressure from US President Donald Trump to slash borrowing costs, policymakers have been moving cautiously, as they face a tricky combination of rising prices and mixed signals from the job market.