In 2025, according to analyses from Kpler, Vortexa, and TankerTrackers, Venezuela, Iran, and Russia supplied 35-40% of China's oil demand. In Russia’s case, it also met a third of China's natural gas demand.

As they are sanctioned countries, they operate with intermediaries, ship-to-ship transfers, and other opaque means to evade sanctions, which means in reality these countries probably meet 50% of China's demand.

All this oil is sold to the Chinese with discounts ranging from 10% to 20% and in special cases can reach 30%. That’s good business.

These purchases have helped boost the competitiveness of various Chinese sectors, mainly petrochemicals, producing naphtha and derivatives like ethene, propene, plastics (PE, PP), resins, solvents, and basic chemicals at highly competitive prices, with China dominating 40-50% of global petrochemical capacity, exporting plastics and chemicals at unbeatable prices, gaining market share in global markets (Asia, Africa, Latin America).

The cheap oil also directly impacts the costs of Chinese infrastructure and fuel refining, which gains billions of dollars.

In a world where the West has increasingly expensive energy, the Chinese government showed skill and made great deals, which further boosted Chinese competitiveness, something that the West now wants to end by force.

The hawks in Washington, after taking Venezuela off the board, authorized this week that Caracas sell oil to the Chinese, but they will set the price. This evidences one of the objectives until now little discussed by political and military analysts. The Maduro Operation to decapitate the Venezuela had less to do with promoting values of boosting democracy, but simply levelling the commercial playing field of competing US products in a market where China had won itself an unbeatable competitive price advantage.

With Venezuela out of the game, Washington is now turning its attention to Iran.

If the Persians have a similar end to the Venezuelans, this will impact the competitiveness of the Chinese industry, which will then depend exclusively on cheaper Russian oil and thus have greater difficulties in getting discounts. The Chinese also have a 10,400-kilometer railway creating a corridor directly linking China and Iran that became operational in mid-2025, traversing Kazakhstan, Uzbekistan, and Turkmenistan to connect Xi’an with Tehran. The advantage of the rail link is it is impervious to pressure by the US navy.

The relationship between the Chinese and Iran involves military, energy, and many mineral issues, since Persian lands house something between 7-10% of the planet's mineral reserves.

The contradictory thing is that these discounts only exist because the West imposed sanctions on these countries and only now realized that with this it was favouring its biggest rival: China. Many critics argue that the West no longer has the power of decades ago to decide the shine or ostracism of a nation through the sanctions mechanism in an increasingly multipolar world.

Although American hawks are targeting the cheap supply to the Chinese, militarily any action against Iran will be a great challenge.

Although Iran has an irrelevant air force, war at sea deeply favours them. Iranian anti-ship missiles like the Qadr-474 have a range of up to 2,000 km, which is 8x the average of European missiles and 30% greater than the maritime version of the Tomahawk. In terms of developing naval anti-ship munitions, the US has been asleep at the wheel. This without mentioning thousands of UAV drones, USVs, and UVVs of which Iran is one of the world leaders. The US has been napping on the development of drone technology too.

A direct attack on Iran could close the Strait of Hormuz, where one-third of the world’s seaborne oil trade, and almost one-fourth of LNG passes, throw oil prices sky high, widely favouring the Russians.

And if Iran decides to close the strait, this will be something long, done with the stock of 5,000 sea mines and 20-23 mini submarines equipped with special torpedoes and submerged-launched Jask-2 anti-ship missiles, besides long range cruise anti-ship missiles that equip other 6-7 larger submarines. Iran even has three Kilo-class Russian-made submarines with a stealth range of 300km during which they are virtually undetectable.

With a fleet that even counts the destroyer Sahand and other 25-30 frigates, corvettes, and patrol boats, all equipped with missiles, the Iranian navy can impose a combat of many months in the strait.

Another great peril of this navy is its mosquito fleet of catamarans and fast boats equipped with missiles and some even with anti-air defence systems. Just in 2020, Iran commissioned 100 of these vessels.

A second strike group is being sent to the region, with the intent to reinforce the American fleet, which already has about 1,000 Vertical Launch System (VLS), but still below the 1,600-2,000 launchers present in the Iranian navy. Again, I emphasize that a battle at sea favours the Iranians, while the massive use of planes greatly favours the Americans. It will be a battle mainly of two different doctrines: large ships composing a navy to project power, facing a navy focused on low cost, in the Mosquito strategy.

Iran is a nation of 90mn people and one of the top 5 in drone and missile technology. And the Americans will have a challenge ahead, which is to break through the Iranian naval defences at a time when Tehran is in survival mode and will probably fight with everything it has.