Forbes | Panos Mourdoukoutas : China’s next big problem won’t be in the South China Sea. It will be in the Strait of Hormuz.


That’s where both Washington and Teheran want to enforce their own freedom of navigation.

This prospect moves the US and Iran closer to a direct military confrontation. If that turns out to be the case, it will disrupt Middle East oil supplies and push crude oil prices above $100 level.

That could be bad news for China – because the Middle East suppliesclose to 50% of China’s oil imports.

It could be good news for American frackers, who will have to pump oil as fast as they can to make up any supply shortfall to America’s allies.

It could be good for Russia, which will have to sell more oil to its own allies, including China.

And it could serve Saudi Arabia’s interest in containing Iran.

For several years, Washington has been the de facto guarantor of the free flow of oil from the Gulf to its Asian and European allies. That’s a role Washington wants to continue to play, together with its close ally Saudi Arabia, an Iran adversary.