Electrostates vs. petrostates: The US, China, and the Hormuz energy shock

Brookings | Scott M. Moore

The U.S.-Israeli military strikes on Iran on February 28, 2026, closed the Strait of Hormuz, triggering the largest oil supply disruption in history and pushing Brent crude to $100 per barrel. While the United States drew down reserves to export a record 5.6 million barrels per day in May 2026, China responded by slashing crude imports by 3.6 million barrels per day.

Beijing insulated its domestic market by drawing upon a 1.4 billion barrel crude stockpile, boosting coal generation from its 1,200-gigawatt fleet, and expanding Russian crude imports to replace 1.38 million barrels per day of Iranian supply. Concurrently, electric vehicle adoption displaced over 1 million barrels per day of oil demand. Beijing's 15th Five-Year Plan subsequently raised its 2030 renewable energy target to 25%. Consequently, American gains remain tethered to transient fossil fuel exports, whereas Chinese cleantech dominance positions Beijing to control post-crisis energy supply chains.

Comment

Beijing's expansion of non-fossil energy targets in the 15th Five-Year Plan demonstrates how maritime chokepoint vulnerabilities accelerate structural grid transformation. By using coal reserves and ESPO pipeline imports as short-term shock absorbers, China avoids emergency fossil-fuel purchasing while preserving capital for domestic electrification. This operational trade-off accepts temporary inefficiencies in thermal generation to insulate long-term industrial policy from Persian Gulf instability.

Consequently, while Washington relies on Permian Basin production to offset Persian Gulf deficits, Chinese policy prioritises total market dominance in photovoltaic manufacturing and battery supply chains. This structural divergence leaves American energy leverage bound to finite hydrocarbon exports, whereas the 15th Five-Year Plan locks in permanent gains across global power equipment markets.

Strategic Question for Discussion

Which carries greater long-term strategic weight in a prolonged Persian Gulf disruption — the immediate export capacity of the Permian Basin or the structural demand reduction achieved through the 15th Five-Year Plan?

The available evidence points toward structural demand reduction as the decisive long-term factor. While Permian Basin exports generate immediate commercial liquidity, they fail to reduce a state's baseline vulnerability to maritime interdiction in the Strait of Hormuz. Conversely, the 15th Five-Year Plan permanently alters the underlying demand equation, converting short-term supply shocks into a catalyst for technological self-reliance.

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