When Iran closed the Strait of Hormuz earlier this year, experts projected oil prices would go to $200 a barrel. But then… they didn’t. In fact, while gasoline prices rose in the United States, and Europe and Asia suffered higher costs, the resulting energy crisis wasn’t even as bad as what followed Russia’s 2022 invasion of Ukraine. Why? China. The country seems to have absorbed the costs of Trump’s war of choice by releasing hundreds of millions of barrels from its strategic stockpile. On this episode of Shift Key, Rob is joined by Rory Johnston, an oil markets researcher and the author of the Commodity Context newsletter. They discuss China’s massive (and quiet) intervention, why it’s “the most important thing we learned” from the Iran War, and what it means for the future of energy and geopolitics. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News. Mentioned: China Oil Demand Doubts, Rory’s 2023 article about Chinese strategic stockbuilding Previously on Shift Key: Why the Iran Ceasefire Hasn’t Ended the Energy Crisis, featuring Rory Subscribe to Heatmap Daily -- This episode of Shift Key is sponsored by ... Heatmap Pro brings all of our research, reporting, and insights down to the local level. The software platform tracks all local opposition to clean energy and data centers, forecasts community sentiment, and guides data-driven engagement campaigns. Book a demo today to see the premier intelligence platform for project permitting and community engagement. Music for Shift Key is by Adam Kromelow. Hosted on Acast. See acast.com/privacy for more information.

How China Saved the World From Trump’s Energy Crisis

Shift Key with Robinson Meyer

# Full Transcript

**Podcast:** Shift Key with Robinson Meyer

## Transcript

This episode of Shift Key is brought to you by Heatmap Pro. You already rely on Heatmap for daily reporting and commentary on the energy transition. That's why you listen to this show. Well, Heatmap Pro brings all of our research, reporting, and insights down to the local level. It's a software platform that tracks all local opposition to clean energy projects and data centers. It forecasts community sentiment, and it guides data-driven engagement campaigns.

Go to heatmap.news slash pro to book a demo and see the premier intelligence platform for project permitting and community engagement. That's heatmap.news slash pro.

I'm sure we'll work it out. I want to talk in this episode, though, about what just happened, the past 110 days, give or take, of war between the U.S. and Iran, and the most important thing that I think we learned during that war. This show is about a phenomenon that I think has not gotten enough play compared to its enormous importance, and that is that China helped save the world from economic calamity.

China, as you'll hear in this episode, primarily buffeted the world from the economic impacts of Trump's war of choice in Iran, and the implications of that are really massive. So you'll remember at the beginning of the war, a lot of energy experts, including those we had here on Shift Key, talked about how oil was going to hit $150 or $200 a barrel.

Iran had just closed the Strait of Hormuz. It was the biggest supply shock to the oil market in history, and everyone expected the biggest price shock in the oil market in history to follow. But then it didn't happen. Brent, the global oil benchmark, peaked around $115 a barrel on May 4th, and of course it shot up right after Iran closed the Strait of Hormuz, but it was very volatile, and it never hit $140 or $150 or $160 a barrel, which people were predicting.

Gas prices obviously went up here in the U.S., but we never got $7 or $8 gas in most of the country. Europe was at one point forecast to run out of jet fuel. It never actually did that. So why? Why did we have this huge supply crisis in the oil market, but no comparative price crisis? Well, we know it has something to do with China.

We know that starting around the same time that Iran closed the Strait of Hormuz, China significantly cut down its oil imports by something like 3 to 5 million barrels a day. That is, for context, a huge amount of oil. It's about 3 to 5 percent of global oil demand. But we also know during this period, China didn't seem to use less oil. And that means China was releasing oil. It was making 3 to 5 million barrels a day of oil appear from somewhere.

Where? How did it do that? Well, you'll hear in this show, at least you'll hear as best as we can figure it out, but the results mean a lot for the future of everything, actually. They mean a lot for the future of climate change and climate policy, for the future of the ...

How China Saved the World From Trump’s Energy Crisis

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How China Saved the World From Trump’s Energy Crisis

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.