The global environment confronts yet another big challenge as the United States wants to cut off China’s oil supply from Iran. This decisive step is a critical component of Washington’s “maximum pressure” on the Iranian economy as part of its regime change operation, which involves shutting off almost all oil exports. It also intends to undermine the world’s biggest and most energy-intensive industrial power, China.
If the United States can block China from obtaining oil at reasonable costs, it would clearly damage the competitiveness of its manufacturing sector.
Countries affected by Washington’s economic war such as Iran have been selling their oil to China at reduced prices (Screenshot Reuters headline October 11, 2023)
Scott Besson, the head of the US Treasury Department in the Trump administration, has reaffirmed this commitment, with the aim of reducing Iranian oil exports by more than 90%. Of course, if implemented, this would plunge Iran into a catastrophic economic crisis that would hit its people hard. However, this lethal coercive policy—which will slaughter innocent civilians—is not limited to Iran; it has a direct impact on China, the largest buyer of Iranian oil. The Chinese economy’s dependence on low-cost energy imports, especially Iranian oil, further exacerbates the current situation.
The US empire determines on its own that Iran will no longer export 90% of its oil to impoverish the latter. (Bloomberg headline, February 14, 2025)
China is by far Iran’s greatest oil customer (source: Kpler)
The implementation of these “sanctions” will likely lead to an increase in global oil prices, which will impact not only China, but also the European Union and the United States itself. However, as China is able to source oil from a variety of suppliers, not least Russia, Beijing’s shortage could be mitigated. Nevertheless, the financial impact would be significant and affect global markets.
The U.S. wants to kill three birds with one stone: reducing Iran’s oil revenues to trigger a domestic uprising and regime change, to undermine China’s industrial strength, and to expand its own oil production capacities. This approach also includes the introduction of sanctions against an international network responsible for the transportation of Iranian oil to China.
It is part of Washington’s broader strategy that also includes efforts to impede China’s Belt and Road Initiative (BRI), which aims to enhance investment, development, and trade among nations worldwide, utilizing both maritime routes and overland connections. Washington employs a range of diplomatic, economic, and strategic tactics to achieve its disruptive goal.
This encompasses a spectrum of tactics, from instilling fear through the misleading narrative of China ensnaring emerging economies in debt traps, to offering alternative infrastructure financing, and employing significant diplomatic pressure to dissuade countries from engaging with or withdrawing from BRI.
Under false pretenses, the United States could also gradually create choke points – as in the case of the Panama Canal – in order to restrict or block Chinese trade. Additionally, its tactics include strenghtening strategic and military alliances that pose a threat to China, alongside imposing sanctions and restrictions on Chinese companies.
The United States’ encirclement of China is escalating. Although China has not a single military base near the United States, Washington, of all places, continues to speak about the “Chinese threat”. [Source: caitlinjohnstone.com]
The escalating hostility of both the Biden and Trump administrations has drawn stark parallels for the Chinese people, evoking memories of the dark times when Western powers and their Japanese allies invaded, plundered and inflicted great suffering on the country.
The antagonistic stance towards Iran is poised to result in substantial repercussions, particularly if the US decides to target Chinese banks or refineries. It would trigger a significant reaction from Beijing and dramatically escalate existing tensions. After a century of humiliation by Western powers that ravaged China with opium wars and Western aggressors that rampaged through Beijing’s Summer Palace much like the Islamic State (ISIS) when China’s leadership was weak, this time it is showing strength and resolve as it will no longer tolerate being humiliated by its toxic adversaries. China now has a new track record of
responding to economic aggression, and this situation seems to join that trend.
The bullied one is determined to strike back at the Big Bully. (Bloomberg headline, 15 th February 2025)
Washington’s strategy goes beyond the immediate economic impact aimed at destroying Iran’s economy and weakening China’s; it also aims to maintain the US dollar’s status as the leading global reserve currency. While nations such as China and Russia are moving to trade in their national currencies, the US is determined to maintain the supremacy of the petro-dollar system at all costs. The shift away from dollar-dominated trade poses a significant challenge to US supremacy, prompting it to use all its foreign policy tools, including the weaponization of oil trade and massive tariffs, to combat this new trend. Washington’s comprehensive economic strategy is thus aimed at strengthening the dollar’s position in global trade, even in the face of the likelihood that this will backfire.
China now has an impressive toolkit, including minerals essential to US military and civilian industries, to deter its aggressors and retaliate. “China Dominates the Supply of U.S. Critical Minerals List,” writes Critical Capitalist (Screenshot Critical Capitalist)
In summary, US efforts to restrict China’s oil imports from Iran represent a complex strategy with significant geopolitical and economic implications. The strategy aims to exert maximum pressure on Iran to achieve “regime change” on behalf of ally Greater Israel and strengthen the US dollar, but also has the potential to massively provoke China and disrupt global markets. The risk of retaliation and the impact on global oil prices make this a high risk bet It remains to be seen how the situation will develop, whether the US will continue its reckless approach or whether diplomatic ways can be found to ease the situation while maintaining its overarching goal of dominance over China. All eyes are on the unfolding events as we know that these geopolitical moves could have significant consequences for us all.
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