Last updated on March 9th, 2026 at 04:21 pm
UPDATE 3/8: 70s dynamics, 2026 politics
Oil markets have swung sharply as the conflict involving Iran escalated and shipping disruptions intensified around the Strait of Hormuz. Tanker traffic through the corridor has slowed dramatically, with many vessels anchored while insurers and operators reassess security risks. The disruption pushed benchmark crude above $100 per barrel for the first time since 2022, with intraday spikes approaching $120 before partially retreating as traders priced in the possibility of prolonged instability.
Analysts emphasize that the current volatility reflects both real logistical constraints and a rapidly expanding geopolitical risk premium, with energy exporters cutting output, tanker movements stalling, and governments weighing emergency supply measures to stabilize global markets.
Oil traders are drawing comparisons to the energy shocks of the 1970s as tensions around the Strait of Hormuz raise the possibility of a supply choke point reminiscent of the disruptions triggered by the 1973 oil crisis. While today’s market is structurally different, thanks to diversified supply, strategic petroleum reserves, and the rise of U.S. shale production, analysts note that the strait remains the single most important artery for global crude shipments. As a result, even limited disruptions tied to regional tensions involving Iran have prompted traders to price in a geopolitical risk premium similar to the market psychology that drove volatility during the 1970s energy crisis, reviving concerns among businesses about the potential for sudden energy cost shocks across transportation, manufacturing, and global supply chains.
UPDATE 3/1: The Ammunition Clock Is Already Running
The most underreported dimension of this conflict is how quickly the United States runs out of the ability to defend itself in the theater: not in months, but potentially in days.
Former CIA analyst Larry Johnson, speaking with journalist Glenn Diesen hours after the strikes began, laid out the math. US Patriot and THAAD air defense systems require a minimum of two interceptors fired per incoming missile or drone. Annual US production capacity sits at roughly 800 Patriot interceptors and an estimated 150 THAAD rounds. Iran, by Johnson’s assessment, maintains a ballistic missile inventory exceeding 10,000 across 18 variants, housed in hardened underground facilities with mobile launchers and multiple dispersed entry and exit points, the kind of infrastructure the US has not deployed the bunker-busting ordnance required to reach. By that arithmetic, 400 Iranian missiles exhaust an entire year of US air defense production. Iran demonstrated in June that it can launch at that scale in a single barrage.
Former Ambassador Chas Freeman, also speaking with Diesen, broadened the picture further. The US arsenal was already depleted before this war started, drawn down by years of supplying Ukraine, the attacks on Venezuela and by the defense of Israel during the June 12-day war. Freeman noted that regardless of the outcome of this conflict, America’s capacity to respond to other challenges has been severely diminished. The industrial base cannot replenish what is being spent. And Johnson flagged an additional constraint that connects directly to the broader great power competition: Chinese restrictions on rare earth minerals feed directly into the production of these missile systems. The country providing Iran with satellite targeting intelligence is simultaneously constraining America’s ability to manufacture the interceptors needed to survive what that intelligence enables.
The naval picture compounds the problem. Johnson noted that with the Fifth Fleet’s primary resupply port at Bahrain damaged in Iranian strikes, US destroyers and cruisers that exhaust their missile tubes must now sail roughly three days south to Diego Garcia and three days back, six days during which Iran faces no seaborne threat from the south. The war of attrition does not require Iran to sink a carrier. It requires Iran to outlast the contents of American missile tubes and wait for the reload cycle that cannot keep pace.
This is the dimension that transforms the conflict from a question of who hits harder on day one into a structural question about industrial capacity, supply chains, and time. Iran’s strategy is not to win a battle. It is to sustain one longer than the US can afford to fight it.
Original Post:
As US and Israeli strikes hit Tehran this morning, Iran fired back; not just at Israel, but at US bases across Qatar, Bahrain, Kuwait, and the UAE. The IRGC called it their “first wave.” One person is confirmed dead in Abu Dhabi. Sirens sounded from Doha to Dubai. Every country hosting an American base in the Middle East is now inside the blast radius.
But the detail that should stop you cold because of its implications is this: China helped Iran find those bases.
For weeks, a Chinese commercial satellite firm called MizarVision has been publishing annotated high-resolution imagery of US military deployments across the region, identifying F-22s, F-35s, EA-18G electronic warfare jets, THAAD missile defense batteries, and Patriot systems by type, count, and exact position. The PLA’s official social media channel amplified the releases with a video titled “Siege of Iran: where will the US military launch its attack?” showing eight US bases under Chinese monitoring. Defence analysts now assess that China is functioning as a real-time surveillance and reconnaissance partner to Iran, supplying satellite imagery, electronic intelligence, and BeiDou navigation system integration directly into Iranian command networks.
This is not ambiguous. A Chinese firm published the coordinates. The PLA broadcast them. Iran is now firing missiles at the locations depicted in those images.
No one is shooting at China. This is not, in the formal sense, a global war. But the architecture of one is now visible. The United States provides Israel with intelligence, weapons, and operational coordination to strike Iran. China provides Iran with satellite surveillance, targeting data, and navigation infrastructure to strike back at US bases. Both sides are fighting through partners, a proxy arrangement that risks becoming something far worse if not treated with great caution, while maintaining the fiction of non-involvement. The US Space Force, notably, has spent the past week publicly discussing the need for offensive capabilities against Chinese satellites, language that would have been unthinkable six months ago.
The Business Shock Is Already Here
The military escalation is not theoretical for the global economy. It arrived this morning.
Dubai International Airport (the busiest international airport on Earth, handling over 90 million passengers a year) has suspended all flight operations. Emirates, the world’s largest long-haul airline, grounded its entire fleet. So did flydubai, Air Arabia, and Qatar Airways. The UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, Israel, and Iran have all closed or partially closed their airspace. Turkish Airlines cancelled flights to the entire region through March 2. Wizz Air suspended service to Israel, Dubai, Abu Dhabi, and Amman until March 7. Thousands of travellers are stranded. Departure boards across the Gulf are a wall of red.
And then there’s the Strait of Hormuz. Twenty percent of the world’s oil, roughly 20 million barrels a day, transits through a waterway that is 33 kilometres wide at its narrowest point, bordered by Iran to the north and Oman and the UAE to the south. Iran conducted live-fire military drills in the strait just ten days ago. Its parliament voted last year to authorize closing the strait in the event of a full-scale war. As of this morning, Bloomberg is reporting that oil tankers are already piling up on both sides of the entrance, with shipowners choosing to wait rather than transit. The strait is technically open. The insurance markets and the captains making real-time decisions are telling a different story.
Goldman Sachs has warned that a Hormuz disruption could push oil past $100 a barrel. Analysts at Lombard Odier say a temporary spike beyond that is plausible. Roughly 84% of crude passing through Hormuz is bound for Asia. China, India, Japan, and South Korea account for nearly 70% of those flows. A sustained disruption doesn’t just raise fuel prices. It feeds through to manufacturing costs, shipping rates, food prices, and inflation worldwide.
The Venezuela Question
This is where the sequence of events over the past three months starts to look less like a series of unrelated crises and more like a supply chain strategy.
Venezuela holds the world’s largest proven oil reserves. Iran holds the fourth largest. The two countries had built an extensive sanctions-evasion partnership: Iran repaired Venezuelan refineries, Venezuela provided crude, and both used shadow fleets of falsely flagged tankers to move oil to China — Iran’s primary customer and, not coincidentally, the country now providing Tehran with satellite targeting intelligence.
The US seized Venezuela first. Claude (the AI model Anthropic just got blacklisted for protecting) was used in the operation to capture Maduro. The administration has since moved to control Venezuelan oil production, lifting sanctions to allow foreign companies to operate there while seizing shadow fleet tankers as far away as the Indian Ocean. Just yesterday, the Justice Department filed to take legal ownership of a tanker and nearly 2 million barrels of petroleum seized off Venezuela’s coast in December.
Now Iran is under attack, and the Strait of Hormuz is in play. If Hormuz closes or becomes functionally unusable, the world loses access to a quarter of its seaborne oil trade. But the US has already positioned itself with an alternative source: one it seized by force, with the largest proven reserves on the planet.
Whether this was planned as a sequence or merely looks like one in retrospect, the effect is the same: the administration has secured access to Venezuelan oil while launching a war against the country that controls the other side of the world’s most critical energy chokepoint. The Institute for Energy Research noted this week that if both Venezuela and Iran are removed from China’s supply chain, it would devastate Beijing’s seaborne oil imports.
The escalation pathways are stacking. If an Iranian missile guided by Chinese satellite intelligence kills American service members, the pressure to respond against the intelligence source, not just the shooter, becomes immense. If China loses a satellite to American offensive action, the escalation extends beyond the Middle East entirely. Every step in this chain has a next step, and none of them lead backward.
This morning, Donald Trump told the Iranian people their hour of freedom was at hand. What he did not mention is that the war he just started may have more simultaneous escalation vectors open than any conflict since 1962’s Cuban Missile Crisis, and it is moving faster than any institutional brake; diplomatic, legislative, or military, can respond.
Business often functions as a stabilizer in times of conflict — trade can mitigate, slow conflict, or push it to negotiation versus outright hostility. But rarely when oil is involved. And that through line which has persisted through most of the major US aggression stories of the past 50 years, is more present than ever.
The difference is that Trump, like many bullies, fails to recognize that the US is no longer the only dominant superpower at the table. China’s technological capabilities are enormous. It has some military capabilities (drone manufacturing, ground troops, naval fleet size (hull count), rocket artillery and defense supply chain control) that outstrip the US’. Its AI capabilities are developing very quickly. It is not blacklisting its most advanced innovators. It’s an asymmetrical comparison, but allied with Russia’s nuclear arsenal, it completes a threat sphere the US has never contended with. More importantly, China is not overextended, it invests heavily in its military, and it does not have nearly the same degree of domestic dysfunction that the US is currently grappling with.
The US’ alliances have always been its core strength, but Trump has done so much damage that many of those alliances are now weakened. Meanwhile China’s global influence grows. The world seems to be waiting for the moment when China asserts itself, and that will not be a good moment for anyone, least of all Trump, for it will not move without confidence in its position. And its current actions indicate a certain readiness.
