Mar 10, 2026 14:39 pm IST

Opinion | The Country That Buys 90% Of Iran's Oil Is Still Not Panicking. Here's Why

Beijing has spent two decades preparing to answer: what happens when the Strait of Hormuz closes?

Aditya Sinha Aditya Sinha

In Suetonius's Life of Vespasian, the emperor's son, Titus, complained that his father was taxing the city's urine collectors. Vespasian held a gold coin to Titus's nose: does this smell? Pecunia non olet. Money has no smell. For the better part of a decade, China has purchased Iranian crude, which is sanctioned by the West, sold at a discount, frequently relabelled "Malaysian blended oil" to avoid scrutiny. This has been done without apparent discomfort at the provenance. Iran accounted for roughly 13% of China's seaborne crude imports in 2025 (Kpler). The discount was the point. The smell, if there was one, was acceptable.

The war that began on February 28, when US and Israeli jets struck Iran, has not changed the underlying logic. It has, however, changed the arithmetic considerably. In eight days, it has produced the sharpest oil price shock since Russia's 2022 invasion of Ukraine, rattled stock markets across three continents, pushed governments towards emergency reserve releases, and posed a question that Beijing had spent two decades preparing to answer: what happens when the Strait of Hormuz closes?

A Panic-Stricken World

Holmes, in A Scandal in Bohemia, observed that it is a capital mistake to theorise before one has data. The data are now available. Brent crude surged approximately 50% in eight days, touching $119.50 a barrel on Monday, the highest in four years. West Texas Intermediate moved in lockstep, briefly hitting $119.48. Both retreated to around $105 after the Financial Times reported that G7 finance ministers were convening an emergency call to discuss coordinated reserve releases.

The average American petrol price rose from $2.98 to $3.45 a gallon in a single week. Iran has brought the Strait of Hormuz to an effective halt. Around 20% of global crude normally transits it, along with 30% of Europe's aviation fuel and 20% of global LNG. Iraq, the UAE and Kuwait have cut production. Tankers sit fully loaded with nowhere to go.

The International Monetary Fund's (IMF) formula for such a shock is quite........

© NDTV