The United States struck Iran, shut down a fifth of the world’s oil supply, and watched its closest allies walk straight into Beijing. Three moves, one target, and a plan that appears to be backfiring spectacularly.
On 28 February 2026, the United States and Israel launched Operation Roaring Lion and Operation Epic Fury, striking over 500 Iranian military targets in a single day. Supreme Leader Ali Khamenei was killed. Iran’s missile capability was degraded by 90% within ten days. The Strait of Hormuz, the narrow waterway through which one fifth of the world’s entire oil supply passes every single day, went silent. Within six days, the price of oil climbed from roughly $60 per barrel to $115. The official justification from Washington was straightforward: Iran’s nuclear programme posed an unacceptable threat. Reasonable enough. Except Iran also happened to be China’s single largest oil supplier, shipping 1.38 million barrels of cheap, sanctioned crude to Beijing every single day.
That detail is worth sitting with.
The Strait of Hormuz carries between 18 and 20 million barrels of oil daily. It serves Saudi Arabia, the UAE, Kuwait, Iraq and Qatar simultaneously. When tanker operators parked their ships at the waterway’s edge rather than risk the crossing, the world faced a sudden supply shortfall of approximately 15 million barrels per day. Kuwait declared force majeure on oil contracts. Insurance premiums for Gulf shipping soared. Analysts stopped dismissing $200 per barrel as fantasy and started treating it as a genuine scenario. The global oil market, which had a surplus of barely one to two million barrels per day before the war began, had no buffer left.
For India, the consequences were immediate and serious. India imports 88% of its oil and nearly 40% of its crude passes through the Strait of Hormuz. Higher oil prices push up inflation, widen the trade deficit and slow economic growth all at the same time. Every stage of India’s food supply chain depends on energy costs, from fertilisers made from natural gas to trucks running on diesel to shipping containers crossing oceans. India had no clean options. It watched, calculated, and on 10 March 2026, quietly amended Press Note 3, the rule introduced after the Galwan Valley clash of 2020 that forced Chinese investors through a mandatory government approval process. Electronics, semiconductors and capital goods manufacturing now moved through a 60 day fast track. Chinese stakes under 10% cleared automatically. The door that India bolted shut in 2020 opened slightly wider. With oil at $115 and supply chains fracturing globally, New Delhi decided that strategic caution had a price tag it could no longer afford.
Iran was not the first move against China’s energy supply. On 3 January 2026, US forces launched Operation Absolute Resolve in Venezuela, capturing Nicols Maduro and installing American oversight over Venezuelan oil infrastructure. Venezuela had supplied China with up to 746,000 barrels of discounted heavy crude every single day. After the operation, that figure fell by 74%. American companies took over production. Beijing protested and then went quiet. Before Venezuela, the tariffs. Since March 2025, Trump imposed duties of between 20% and 145% on Chinese goods, targeting semiconductors, technology and manufacturing directly. Three separate operations. Three separate official justifications. Every single one of them hit China’s energy supply, trade relationships or economic partnerships.
Yet China’s exports in January and February 2026 jumped nearly 22% compared to the previous year. Semiconductor exports rose 73%. Auto exports climbed 67%. Trade with the European Union grew by 28%. Canada, the UK, France and Germany all sent their leaders to Beijing, calling China a stable and reliable partner while Trump’s tariffs made Washington feel like anything but. A US Supreme Court ruling against the sweeping tariff regime already brought levels down for multiple countries, China included.
The pressure on China was real. The costs were real. But the outcomes did not match the intentions. The world that American foreign policy tried to build, one in which China stayed contained, isolated and energy starved, did not materialise. What materialised instead was a China that exported more, diversified faster and pulled America’s oldest allies closer, while oil markets bled and the rest of the world quietly recalculated where it stood.
