The conflict's focus is solely on one nation: China. For years, China has been acquiring cheap oil from both Iran and Venezuela.
Before the Venezuelan takeover, China absorbed between 50% and 89% of Venezuela's total crude oil exports. Much of this trade was facilitated through a "shadow fleet," often rebranded as coming from countries like Malaysia to circumvent U.S. sanctions.
Moreover, a significant portion of China-Venezuela trade was conducted in yuan, contributing to a decline in dollar dominance. In terms of Iranian oil, China purchased more than 80% of all Iranian crude oil exports last year.
Iranian oil typically trades at a steep discount of $8 to $13 per barrel below the international Brent benchmark, leading to an estimated savings of $10 billion for Chinese refiners in just one year. Similar to Venezuela, the China-Iran deal was primarily executed in yuan.
Estimates suggest China imported 20% of its crude oil from Venezuela and Iran, effectively bypassing the USD. The U.S. is actively seeking to disrupt this trade.
As a result, China has criticized U.S. actions against Venezuela and Iran. Recently, China officially opposed U.S. and Israeli military initiatives in Iran and urged Iran to reopen the Strait of Hormuz.
China understands that prolonged conflict could compel it to conduct trade deals in USD should the U.S. gain control over Iranian reserves, which would ultimately weaken its economic standing.
Meanwhile, Trump's strategy appears aimed at making China as weak as possible, as coexistence of two global superpowers is seen as unviable.
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