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Page added on September 5, 2015
China’s Worst nightmare–The US Oil Weapon
Tingbin Zhang writes: China’s islanding building on the four-mile-long and two-mile-wide Subi Reef in the South China Sea has put The US in a tight spot. To protect its ally from China’s aggression, The US will be left with little choice but to constrain China by military means. However, the US won’t directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1 and no.2 economy the fallen giants.
So There is a possibility that The US might use its oil weapon instead to strike at the core of China’s weakness–it’s huge dependence on oil import. At the moment, China imports 55% of its oil, almost half of which sails from countries in the Persian Gulf，which accounts to 5.3 Million Barrels per Day and is around 75% of Saudi Arabia’s production. As the matter of fact, China’s reliance on Middle Eastern oil has gradually grown in line with its rapid-increasing demand for oil. Right now, China has achieved the equivalent of the peak of U.S. Oil import dependence and is not slowing down a bit. The single largest source of China’s crude oil imports is Saudi Arabia.
China’s state oil reserves of 475,900,000 barrels (75,660,000 m3) plus the enterprise oil reserves of 209,440,000 barrels (33,298,000 m3) will only provide around 90 days of consumption or a total of 684,340,000 barrels (108,801,000 m3).
Meanwhile, This US is inching towards the energy independence. With the technological breakthroughs of shale gas and tight oil, the US has started an energy revolution: U.S. crude oil production has increased by 50% since 2008. With that increase, as well as more efficient cars, oil imports have come down from their high of 60% in 2005 to 35% today—as low as in 1973. With domestic production and gasoline mileage still increasing, imports will continue to decrease. It’s also impressive that U.S. natural gas production has increased by nearly 33% since 2005, and shale gas has gone from 2% of output in 2000 to 44% today.
As of 2013, the United States is the world’s second largest producer of crude oil, after Saudi Arabia, and second largest exporter of refined products, after Russia.According to BP Plc’s Statistical Review of World Energy, the U.S. has surpassed Russia as the biggest oil and natural-gas producer in 2014. While looking at total energy, the U.S. was over 70% self-sufficient in 2008. In May 2011, the US became a net exporter of refined petroleum products.
With the newly acquired oil might, the US can trick Iran to block the Strait of Hormuz without any economic damage onto the US itself, in order to strike a severe blow to China’s fragile economy. First, The US congress will reject the Iran nuclear deal; and second, The US will give the nod to Isreal’s air strike against tehran’s nuclear facilities. And then, Iran will retaliate by blocking the Strait of Hormuz. The Strait is the only sea passage from the Persian Gulf to the open ocean. Once it’s blocked, China will scramble to meet its oil demands. In China, the inflation will jump up; the China yuan will plummet, and an economic meltdown will come to bear.
China will succumb to the US’s might of oil weapon to save itself from political, economic and social collapse. The oil weapon will achieve what the military can’t achieve at less cost. This scenario is something China should be really worried about.
Tingbin Zhang
Chief Strategist
35 Comments on "China’s Worst nightmare–The US Oil Weapon"
lobotx on Sat, 5th Sep 2015 6:41 pm
“First, The US congress will reject the Iran nuclear deal; and second, The US will give the nod to Isreal’s air strike against tehran’s nuclear facilities. And then, Iran will retaliate by blocking the Strait of Hormuz.”
Riiigghhtt, sure they will !
I know it’s a holiday weekend, but…..
Truth Has A Liberal Bias on Sat, 5th Sep 2015 7:33 pm
This article is a joke. I don’t know where to begin. The title is a good start I guess.
“Meanwhile, This US is inching towards the energy independence. With the technological breakthroughs of shale gas and tight oil”
Too many quotes to even know where to start.
RandomGuy on Sat, 5th Sep 2015 7:48 pm
Ahh, the wonders of an interconnected global economy move together to fundamentally deter large scale war. Mostly because the United States holds the oil spigot to China’s economy should things head south thanks to our very large navy.
But then again, we said the same thing in 1913.
Hopefully, what happens is the world peacefully starts running out of gas and economies become neo-feudalistic/late 1800’s again by the mid to late 2030’s.
But I wouldn’t count on it.
Davy on Sat, 5th Sep 2015 8:21 pm
If the US and China engages in economic or military warfare that is the end of the global system in swift order. Any jingoist on either side will discover this the hard way. Our global system is limping along as it is just imagine a war.
Makati1 on Sat, 5th Sep 2015 9:10 pm
Zhonghua Yuan Institute: Taiwan based.
I am always skeptical of articles written for an ‘investment’ mag or site. Especially when I have not been able to find any info on the supposed institute except that it seems to be based on Taiwan, one of the Empire’s ‘colonies’.
I see this as more BS aimed to take down China and keep the oil suckers on the line. The first hint was the propaganda in the beginning: “…the US won’t directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force.” The US cannot even get close to China. Yesterday’s article about it’s missiles are proof of this. And the US Navy knows it.
Another propaganda piece. Nothing more. Nothing less.
Kenz300 on Sat, 5th Sep 2015 11:54 pm
As another shale producer files for bankruptcy…….
Boat on Sun, 6th Sep 2015 2:29 am
The US can go where ever they want in China and do what ever they want. However neither countries could ever afford to fight that fight.
Kenjamkov on Sun, 6th Sep 2015 2:36 am
US fights China with oil, china strikes back with gold. Your war is over and there are no winners, only losers.
joke on Sun, 6th Sep 2015 2:57 am
US will trick Iran? Ok, but Israel cannot bomb Iran, not without the active support of US troops on the ground in Israel. Iran would accept any form of government in Syria and all the different groups would temporarily unite to defeat the IDF. What would likely happen is that British or European peacekeepers would have to go in and we would be back to a pre-ww2 political scenario.
What I see here is that the writer is paranoid and is making excuses about the failure of Chinas economic model to lay the blame at the feet of America before the CCP sends it’s tanks back into Tienamen square again.
Iran is an ally of China and Russia. Also this article uses years old figures.
I’m not convinced that the writer believes what is written, but I guess there is an audience for this sort of opinion.
Boat on Sun, 6th Sep 2015 3:07 am
Kenjamkov,
Learn to google, there is not enough gold mined to support the currency already issued. Trust in money is the repeated transactions where trade is paid.
Boat on Sun, 6th Sep 2015 3:12 am
joke,
If I remember right Israel needs refueling tanker from the US. That won’t happen. If there is any bombing that will happen against Iran it will only happen if Iran bombs first. The tail doesn’t wag the dog in the real world.
but I guess there is an audience for this sort of opinion.
Lol yes there is, hang out on this site for awhile and you will see it all.
Westexasfanclub on Sun, 6th Sep 2015 4:56 am
Oil as a secure weapon? I’ll only say one name: Pearl Harbor.
Makati1 on Sun, 6th Sep 2015 7:30 am
Dream on Boat. The US cannot ever attack China militarily.
First, it would be committing financial suicide. Need I state why?
Second, it does not make the items of war that it needs, China does. Where do the rare metals come from in the US missiles? China. Where do most, if not all, of the computer components come from that are in ALL of the US weapons systems? China.
Third, China can take down the Us satellites that runs its GPS system. Without that, the navy just putters around the ocean in circles because nothing works.
Fourth, taking on China is to take on Russia also. Both can now target all US resources all over the world and never leave their country. Game over.
The US is a paper tiger, that has not won a war in 70+ years, if ever.
rockman on Sun, 6th Sep 2015 10:18 am
Obviously the writer understands nothing about the Chinese military. Yes: the US would very likely win a conventional war with China. But at what cost to our military? The Chinese have serious conventional warfare capabilities. More important: China would be willing to suffer 10, 20 times or more the loses the US would suffer. And the US public would not tollerate that price tag to protect the interest of Japan or any other country. More important: US politicians understand that.
If someone doesn’t beleive China would sacrifice 100,000+ to protect their sense of soverienty they understand nothing about that govt. China knows we wouldn’t engage them on any serious military level to protect another country’s energy position. Our politicians know it also.
zoidberg on Sun, 6th Sep 2015 11:42 am
China at this moment is very vulnerable to an oil blockade. The US much less so. These are facts. Overland export paths are also impossible to defend. The article is quite good. Haters gonna hate but the US has the advantage on the oil weapon.
The amount it imports is largely for wasting purposes and would not affect a war effort if it was cut off. Iran has repeatedly promised to cut off Persian gulf exports in a war. And that hurts China way more.
PrestonSturges on Sun, 6th Sep 2015 12:14 pm
And if China ever attacks a US allie, maybe the US will say “Screw you, we never pay the money we owe.” Then the rest of the world gets to decide which currency they want to prop up and which one they let collapse. I’m guessing they’d go with the dollar.
rockman on Sun, 6th Sep 2015 12:26 pm
China vulnerablle to an oil blockade? LMFAO! To think that anyone beleives the Chinese wouldn’t attack the vessels of any country, including the US, that tried to block their oil importa is truly living in their own fantasy world. Picture that scenario: a US Navy vessel attempts to block a Russian oil tanker from entering a Chinese port? And there’s some expectation that both the Chinese and Russia navies wouldn’t inject themselves into such a situation? Such an unrealistc view of the real world. So what next: the Chinese blockaide the Port of Houston? LOL.
Boat on Sun, 6th Sep 2015 1:04 pm
The reason Europe and US allies didn’t attack Russia, after Crimea, is the same reason Russia doesn’t attack the US and Europe after the sanctions. Why China doesn’t attack Taiwan and US. Why all the countries sat down to try to do a deal over Iran nukes. The world and none of these countries can afford a war in these modern times. It would be devastating. The o’l self survival instinct kicks in.
Truth Has A Liberal Bias on Sun, 6th Sep 2015 1:10 pm
http://fabiusmaximus.com/2015/09/06/russia-china-steps-to-alliance-89227/
Boat on Sun, 6th Sep 2015 1:26 pm
Rock,
I believe mostly what you say, except.
And the US public would not tollerate that price tag to protect the interest of Japan or any other country
I disagree here. We have made commitments to Japan, S Korea etc. We would have honor those commitments. It may be sanctions or a separation of the free world vrs the rest or a proportional response war till all sides get it together.
Boat on Sun, 6th Sep 2015 1:50 pm
Mak,
Have you ever looked at military spending by country? Even the feared Iran spends less on their military than Greece does. LOL You live in a dream world.
Pakistan could end the world if they decided to commit suicide and nuke 10-20 of the worlds largest cities. So much of the debris would be thrown in the air the world would go into climate freeze.
You call the US a paper tiger I assume you think Europe is to. Their populations have been dragged into many conflicts(not wars) which became unpopular and their Parties were voted out as a result. If generals and hawks had their way the US would look like Hitler with millions more dead. But the US is not like that. We try to kill the fewest possible and only want free trade for rest of the populations who were also drug into conflict.
I say conflicts instead of war because to me war is survival of the fittest. Kill everything that moves. Not since WWII has that happened and that was selected cities. In Iraq the US did not level every city, town and village and leave smoking earth even though it was possible. Think a bit on this.
zoidberg on Sun, 6th Sep 2015 2:26 pm
Rockman the US blockaded Japanese oil in the expectation it would provoke a military response. The Japanese made it clear it was tantamount to a war declaration. Fdr reasons for war aren’t important here. But a similar situation exists.
It would draw their navy out to where they could ambush them with subs. Like you say they’d be forced to respond but it be advantage US.
And there has been strange military activity in the gulf of Mexico and off the west coast. Enemy sub activity off of Texas isn’t inconceivable. I would expect enemy activity to concentrate on Hawaii and Alaska however.
All sides have growing reasons to resort to war and all think they have the advantage. It’s a dangerous combo. Economic dislocations are driving this dynamic.
Bottom line China Cant end an oil blockade if the US does it through Iran. They can make a mess but maybe not enough to make the US doubt it’s efficacy.
Boat on Sun, 6th Sep 2015 3:22 pm
Read about drone subs the US are deploying to track subs. Technology.
dissident on Sun, 6th Sep 2015 5:45 pm
The oil weapon. LOL. What deluded, outdated rubbish. Any day now Saudi Arabia will enter into the Yibal terminal decline mode. Without the Saudis the USA has nothing.
apneaman on Sun, 6th Sep 2015 6:13 pm
Boat, how did that massive mismatch in technology work out for y’all in Vietnam? Afghanistan? Iraq? I recall images of sailors pushing some of that expensive military technology off the ship and into the ocean as the last gesture in a sad defeat in Vietnam. It’s only a tool and meaningless in the hands of a fool.
Boat on Sun, 6th Sep 2015 7:09 pm
Apeman,
You may view those wars as military defeats but I view them as misguided political mistakes. If the military was cut loose like in WWII we could have sent 20x the manpower and used more lethal means. You know this, you just argue to argue. Did you see a D-day type serious invasion with all our allies at hand? That would happen if we were really at war. Did you see manufacturing companies switch to a full throated equipment building mode? Did you see Millions of Americans buying bonds? Maybe you should read just how dangerous the US can be if motivated. Iraq was the last example that even in a limited small operation took out the worlds 4th largest army in what-two weeks?
apneaman on Sun, 6th Sep 2015 7:48 pm
What did it accomplish boat? Did you get a stiffy on “Shock and Awe” night watching CNN? Patriotic tears well up in your eyes? Mission Accomplished? What was that mission anyway? What was the point? Is the world or America a better place? Was it worth it? 4500 dead Americans and over a million Iraqis for the neo con wet dream. Completely fucking useless in every way. Total embarrassment. How or why you would try to defend such a monumental fuck up is beyond me. Never have so few had so much fire power and accomplished so little – made things worse in fact.
A Record of Unparalleled Failure
So here are five straightforward lessons — none acceptable in what passes for discussion and debate in this country — that could be drawn from that last half century of every kind of American warfare:
1. No matter how you define American-style war or its goals, it doesn’t work. Ever.
2. No matter how you pose the problems of our world, it doesn’t solve them. Never.
3. No matter how often you cite the use of military force to “stabilize” or “protect” or “liberate” countries or regions, it is a destabilizing force.
4. No matter how regularly you praise the American way of war and its “warriors,” the U.S. military is incapable of winning its wars.
5. No matter how often American presidents claim that the U.S. military is “the finest fighting force in history,” the evidence is in: it isn’t.
And here’s a bonus lesson: if as a polity we were to take these five no-brainers to heart and stop fighting endless wars, which drain us of national treasure, we would also have a long-term solution to the Veterans Administration health-care crisis. It’s not the sort of thing said in our world, but the VA is in a crisis of financing and caregiving that, in the present context, cannot be solved, no matter whom you hire or fire. The only long-term solution would be to stop fighting losing wars that the American people will pay for decades into the future, as the cost in broken bodies and broken lives is translated into medical care and dumped on the VA.
http://www.tomdispatch.com/post/175854/tomgram%3A_engelhardt,_a_record_of_unparalleled_failure/
Makati1 on Sun, 6th Sep 2015 8:31 pm
Some on here that claim another world war cannot happen because _______, are dreaming. The conditions and situation prior to both previous world wars were similar and the ‘never can happen’ sentiment prevailed, until it didn’t.
The Us cannot do anything militarily without getting it’s ass kicked. (Korea, Vietnam, Iraq, Afghanistan, etc.) As for willingness to win? Perhaps you should review history. In WW2, Russia lost over 20 million of it’s citizen’s and China over 40 million. The US 600,000.
If you think China would not sacrifice another 40 million today or Russia another 20 million, you are dreaming. But the US losses would be in the eight figures also, and on the homeland. That is NOT counting nuke use, just conventional.
Reality seems to be a problem for Westerner’s today. Remember, “Pride goeth before the fall.”
zoidberg on Sun, 6th Sep 2015 8:35 pm
As long as your economy runs on someone elses oil it can be weaponized. It’s been dictating winners and losers since the British switched their navy from coal to oil. Doubt it at your peril.
Also total war risks societal upheaval. Elites everywhere fear it, but peripheral setbacks aren’t the same as losing world wars. Not that I think wars for profits are a good thing, just not fatal.
But China is threatening to undo the spoils of world war 2 and that’s one thing that’s making America confrontational.
And as it is, America does have the Saudis. Their military is all over the middle east. They also have their hands so far up Japan and Germany’s backside they can see a hand when they yawn.
Russia is still dying and is being measured for a coffin by its southern neighbors, once their nukes can be neutralized. It’s elites are scared shitless about getting stuck in Russia. China is turning into Japan demographically. We will remember China and Russia joined via communism in the 50s then fighting on the border in the 60s.
Point is, America holds a lot of cards most of which were grabbed in ww2. What happened since is mostly theater and weapons sales. China and Russia’s best chance to.overturn that order is now, and the USA seems ready to confront this challenge, although competency remains suspect but at least the main strategists are still savvy.
I’m surprised a peak oil site is willfully ignorant about the oil weapon. It’s right up everyone s alley here. I guess it’s just a matter of willful blindness a form of political correctness where the US centered hegemony must be wrong and lose. Being a bunch of evil bastards doesn’t mean you Cant win.
Davy on Sun, 6th Sep 2015 8:58 pm
This is for our board war pig cause He loves war!
“War Pigs”
Generals gathered in their masses,
just like witches at black masses.
Evil minds that plot destruction,
sorcerer of death’s construction.
In the fields the bodies burning,
as the war machine keeps turning.
Death and hatred to mankind,
poisoning their brainwashed minds…Oh lord yeah!
Politicians hide themselves away
They only started the war
Why should they go out to fight?
They leave that role to the poor
Time will tell on their power minds
Making war just for fun
Treating people just like pawns in chess
Wait `till their judgement day comes, yeah!
Now in darkness, world stops turning,
ashes where the bodies burning.
No more war pigs have the power,
hand of god has struck the hour.
Day of judgement, god is calling,
on their knees the war pigs crawling.
Begging mercy for their sins,
Satan, laughing, spreads his wings…Oh lord, yeah!
Boat on Sun, 6th Sep 2015 9:22 pm
zoidborg,
Peakoil, many commentators are willfully ignorant about most things if it doesn’t fit their narrative.
zoidberg on Sun, 6th Sep 2015 9:43 pm
Us mortals are always struggling we can only try to keep our minds open and adaptive.
Davy on Sun, 6th Sep 2015 9:45 pm
Boater I suspect you are including yourself in your above narrative right? I hope so.
Boater, ya drinkin tonight yu a bit sloppy.
James Tipper on Mon, 7th Sep 2015 12:21 am
“Meanwhile, This US is inching towards the energy independence. With the technological breakthroughs of shale gas and tight oil, the US has started an energy revolution”
Hahahahaha, oh man these fucking people, they get to me sometimes. It’s be like bad satire if they weren’t being serious.
Energy independence, that’s some pretty good hopium you have to be smoking.
GregT on Mon, 7th Sep 2015 1:14 am
Boat said:
“many commentators are willfully ignorant about most things if it doesn’t fit their narrative.”
Absolutely disagree with that statement Boat. Most of the commenters here are considerate, and are doing their best to be truthful.
You, on the other hand, are among the small minority of commentators that are willfully ignorant about most things because it doesn’t fit your narrative.
You are full of shit Boat, and you are a liar.