The Trump administration’s decision to carry out a naval blockade of the Strait of Hormuz has raised tensions in the Persian Gulf to new and more perilous levels. The move was announced by the US president, Donald Trump, after negotiations over a ceasefire with Iran broke down on April 11, partly due to Iran wanting to retain control of the vital Strait of Hormuz, through which one-fifth of the world’s oil transits.
The blockade is designed to neutralise Iran’s efforts to close the strait to shipping it deems unfriendly to Tehran and implement a toll system for other vessels transiting the strait.
The US blockade can be seen as the latest attempt by the Trump administration to project strength. But it also throws down a challenge to Beijing. China has been the main purchaser of Iranian oil in recent years and is one of the few nations whose shipping can enter the strait unchallenged.
It appeared very likely that this status would be tested on April 14 when the Rich Starry, a Chinese owned and operated tanker under US sanction for transporting Iranian oil, transited the strait unchallenged by the US warships in the region.
But it has since been reported that the vessel turned back in the Gulf of Oman and headed back to the Strait of Hormuz. The US now claims that six vessels that attempted to transit the strait were turned around.
The Rich Starry’s willingness to avert a potential Sino-American clash, suggests that Beijing is still unwilling to challenge Washington’s red lines, particularly so close to a state visit by the US president next month, a trip postponed from March 31 as a result of the conflict in Iran. China has called the US blockade a “dangerous and irresponsible act”.
But what appears to be a deliberate decision not to challenge the blockade may be interpreted as another instance of Chinese weakness, which will probably embolden Washington to take more active measures against China’s tanker fleets.
However, the US seizure of any Chinese shipping could certainly provoke a more dangerous outcome, with the prospect of increased tensions or even conflict with Beijing. Should the US seize a Chinese vessel, Beijing could see this as an act of war on Washington’s part, if it chooses to interpret such an incident as an American effort to strangle the Chinese economy.
While an armed clash between the US and China in the Persian Gulf is unlikely, it is possible that Beijing may deploy its fleet stationed in Djibouti to the region. China’s base in Djibouti is home to its 48th escort group which has previously performed anti-piracy operations in the region as well as escort duties for Chinese-owned ships in the region. This which raises the question over whether Washington would be willing to fire on Chinese warships to enforce its blockade.
China’s challenge to the US
China’s response to an American blockade may be more indirect in nature. One form this could take is the provision of Chinese weapons systems to Iran.
China’s Beidou satellite navigation system has already played a significant role in guiding Iran’s existing stockpile of missiles against American and Israeli targets. Further Chinese military assistance, especially in the form of missiles and drones, can help Beijing retaliate indirectly through Iran.
The New York Times recently reported intelligence sources alleging that China may have shipped shoulder-launched missiles to Iran – but this was strenuously denied by Beijing.
On the other hand, a potential Chinese retaliation may not even take place in the Middle East. Instead, it is possible that Beijing may target American assets and interests in the Asia Pacific.
This comes at a time where several American allies in the region have become increasingly vulnerable, with some missiles system being deployed to the Middle East from South Korea. Coupled with fuel shortages as a result of the closure of the Strait of Hormuz, the region is potentially even more exposed to China’s moves should Beijing choose to act.
While Beijing prefers a more stable Middle East and global economy, having been one of the key beneficiaries of globalisation, there are several opportunities for China’s wider goals. One of the biggest is the status of the Renminbi. It has become prominent in the oil trade in the Persian Gulf, with Iran primarily dealing with transactions in the currency. This is in line with the emergence of the petroyuan in the 21 century to challenge the dominance of the petrodollar.
Alongside China’s position as a supplier of aviation fuel in the Asia Pacific, the conflict has entrenched and strengthened China’s role in the global economy.
In addition, the potential shortage of petroleum can open the door for wide-scale adoption of electric vehicles (EVs), with Chinese firms such as BYD being potential beneficiaries of a future EV boom. This echoes the popularity of Japanese cars during the Opec crisis of the 1970s, due to their comparatively high fuel efficiency in contrast to American and European models.
As a result, a prolonged Middle East oil crisis may see firms such as BYD become household names, furthering the influence of “Brand China”.
Alongside these, the crisis may further China’s push to present itself as a more stable partner in contrast to Washington’s more chaotic approach. This has gained traction due to the perceived unpredictability of the Trump administration over the past 15 months.
China already has a comparatively favourable global image when compared to the US. A wider conflict with Iran will probably take this further. As a result, the path of the Rich Starry may chart the course of the Sino-American competition and the world that this competition will shape.
