How China Is Avoiding The Straits Of Hormuz Curse

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In a story yesterday about the Peak Energy sodium-ion battery energy storage system, the comments raised a question about how China will deal with the virtual closure of the Straits of Hormuz — the barely two-mile-wide shipping lane between Iran and Oman that, in normal times, controls about 20 percent of global oil and LNG shipments.

China has little domestic oil and gas production of its own, and so relies on supplies of both from other countries. But China is different than most countries. It’s government is able to see beyond the end of next week and take prudent, rational steps to address future needs — something the US has demonstrated is cannot or will not do. Instead it relies on overheated rhetoric from psychopaths like Putrid Pete Hegseth to project an image of robust hyper-masculinity to protect it. Now it is discovering that bombast and bombs are a short-term response to a long-term problem.

Having started the war on Iran without a plan, it now finds itself shocked — SHOCKED! — that Iran has not immediately capitulated. How dare they defy the great and powerful Oz in Washington! What the US has done is prove once again the truth of the maxim, “If you fail to plan, you plan to fail.”

China Has A Plan

Regular reader Dan Allard posted in the comments to the Peak Energy story that “China has a 100 day oil reserve unlike the USA which just released close to half of what we have in the reserve. But more importantly Iran is allowing Chinese ships through the strait. Iran has said any country which kicks out the US bases and embassies will be allowed to have passage they are only blocking US and aligned shipping.”

Latitude Media contributor Nick Zenkin wrote on March 12, 2026, “The Iran war doesn’t give China an energy advantage. The US did. Twenty years of policy whiplash has left the US structurally exposed to exactly the shock it helped create.”

He refers to an article published last week by Foreign Policy, which claimed China may actually emerge from this crisis stronger, because two decades of deliberate electrification have built precisely the kind of hedge this moment tests. “That argument is sound, but it leaves a question unasked: How did China get so far ahead, and what does that say about the country that started the war?” Zelkin asks.

“China’s exposure to Hormuz is real but increasingly limited, as a consequence of a structural shift that has been underway for two decades. Oil and gas flowing through the strait account for roughly 6 percent of China’s total energy consumption, a share that has been steadily declining as Beijing has systematically reduced its dependence on fossil fuels.

“Since the early 2000s, China has pursued a consistent national electrification strategy through successive five year plans, setting non-fossil energy targets each time and consistently exceeding them. This week, China’s National People’s Congress formally adopted its 15th five-year plan, with targets for offshore wind to exceed 100 gigawatts by 2030, a 420 GW clean-energy transmission corridor target, and a 17% carbon intensity reduction goal.

“By 2024, clean energy met 84 percent of China’s electricity demand growth, and nearly half of new passenger vehicles sold in China last year were electric. The result is that oil and gas now supply only a fraction of China’s power mix.”

Many readers have pointed out that China has an enormous fleet of coal-fired generating plants, and that is true. But the number of them is not the whole story. How much they get used is the real key to assessing the impact they have on the environment, and the figures show that utilization rate is quite low because China prioritizes its renewable energy resources.

As Carbon Brief reported in January, “Coal power generation fell in both China and India in 2025, the first simultaneous drop in half a century, after each nation added record amounts of clean energy. The new analysis for Carbon Brief shows that electricity generation from coal in India fell by 3.0 percent year-on-year (46 TWh) and in China by 1.6 percent (90TWh). Pakistan is also bypassing fossil fuels for renewables.

“The last time both countries registered a drop in coal power output was in 1973. The fall in 2025 is a sign of things to come, as both countries added a record amount of new clean-power generation last year, which was more than sufficient to meet rising demand.”

The result is that the current disruption in the Strait of Hormuz, which would have been an economic emergency for China a decade ago, is now a supply shock the country can likely absorb better than almost any other major importer, Zenkin writes. “China didn’t just build clean energy capacity. It redesigned its entire economy around electricity and, in doing so, built a hedge against exactly the kind of geopolitical shock now unfolding in the Persian Gulf.”

Chaos And Economics

Unlike China, with its succession of five-year plans, the US government for 20 years has pursued energy policies that fluctuated wildly with each change in administration. Obama revoked two of his predecessor’s polices, the current incumbent revoked five his first time around, Biden revoked nine, and this time the head honcho has revoked 14, including the Endangerment Finding that has been the foundation of US climate policy for decades.

Zelkin explains: “Capital allocated across a 25-year horizon doesn’t choose between policy regimes based on ideology. It prices the probability that whatever rules exist today will still exist when the asset comes online. A developer can work with a 20 percent chance that the next administration changes a tax credit. What’s harder to price is a pattern in which the rules become less stable with every transition for 20 years running, with each new administration revoking more of its predecessor’s energy commitments than the one before.” Zelkin highlights that while investment in renewable energy in the EU rose by 63% in 2024, it fell in the US by 36% in that same period.

Uncertainty raises prices for everyone, something the fools in Washington seem incapable of understanding. Look at how the goals set by China in its five-year plans have led to solid, predictable results. There may be elements of Chinese society that are not praiseworthy, but its insistence on goal setting offers much to admire — and emulate.

“China made a sustained 20 year bet and now controls more than 80 percent of global solar manufacturing capacity. The pattern now emerging around data centers, grid build out, and electrification infrastructure looks similar: The innovation is often American, but the factories aren’t,” Zelkin writes.

Policy Whiplash

The policy whiplash is real — and a genuine concern. The administration has championed coal and nuclear as near-term answers to the projected power surge by AI data centers. However, this position ignores coal’s economics — and enormous climate and public health toll — and nuclear’s 15 to 20-year construction timelines. It declared an energy emergency to lower costs while imposing tariffs projected to raise the cost of building power infrastructure by 6 to 11 percent. This is the result of electing leaders who are slavishly committed to ideology, not reality.

Lack of predictability due to all of the policy risk is also leading to higher renewable energy financing costs in the US now, as well as investors wanting a quicker return on investment (ROI). Therefore, project development is more limited, and growth of the sector is slower.

“The Iran war does not create an inherent advantage for China. It stress tests both energy systems simultaneously, under live conditions, with real money on the line,” Zelkin adds. “China’s system has been built, over two decades, to absorb exactly this kind of shock. The United States spent that same period debating whether the last administration’s bets were worth keeping. The result is not a Chinese energy miracle. It is an American policy failure that has been compounding over the last 20 years.” [Emphasis added.]

US Global Influence Is Waning

In the New York Times today, there is a story about how the Iran quagmire is affecting both the US and China in the broader global community. The US is removing some weapons systems from South Korea and relocating them to the Middle East — a move that is making government leaders in South Korea very nervous.

Students of history may recall how Australia discovered to its shock at the start of World War II that it was really an Asian country after the UK gave it the grand kiss off and wished it luck with those pesky Japanese. South Korea has gotten several signals from the US in the past year that its support in Washington is faltering, starting with the imposition of new tariffs on its manufactured goods and continuing with the arrest and detention of nearly 500 Korean workers in Georgia last year.

The Times says there have been three major consequences of the US war of choice in Iran:

1. Asian nations are finding that they are far from the United States’ top priority.
2. China will get a boost in influence and confidence.
3. All nations are discovering that they can’t rely on America for weapons.

And here’s an interesting thought. Japan imports 97 percent of the oil it needs to keep its economy going. Many of you may be too old to remember what happened the last time Japan felt threatened by a lack of access to oil. Perhaps the date December 7, 1941, will jog your memories.

South Korea’s president said this week the Iran war shows a clear need for more self-reliance. “If we rely on others, there are times when that dependence can collapse. You always have to think about what you’re going to do if there’s no external support.”

Insatiable Ego

In order to feed the insatiable ego of its leader, the US has elected to put a military plan in motion that threatens to destabilize the world order that has existed since 1945. In a quixotic quest for security, America has made the world less safe. Perhaps that is the plan? Strength through stupidity?

40 percent of Americans are telling pollsters they approve of this adventurism by the Ignoramus in Chief and his coterie of suckups. One thing seems certain. Things will never be quite the same as they were before February 28, 2026. The lack of an intelligent plan may prove to be America’s final undoing.