La Xina va frenar el xoc del petroli iranià? Què expliquen les dades

So you remember at the start of the Iran war, everyone said there was this oil shock coming that was going to basically blow up the whole world. >> World fears an oil shock. >> Global oil shock is raising alarms. This has the potential to be the biggest oil shock in history. >> All the flights were going to get grounded. >> Airlines are saying expect flight cancellation. >> They are cancelling flights. 13,000 flights have been cancelled. >> Cities were going to go dark. the final um vessel carrying jet fuel into the United Kingdom is going to get here in 48 hours and there's no more after that. >> Gas was going to triple in price if you could get any at all. >> Situation was looking pretty dire. >> Gas prices are expected to go up again. >> It would take months to recover it. >> This is just hard math. The world's oil was going to dry up and that would be that. >> How we emerge from this crisis will define us for a generation >> and then it just kind of never happened. oil futures. They're telling you in August [clears throat] actually prices are coming down. >> Markets seem to be showing far less alarm than they did at the start of the conflict. >> And it's not like the predictions turned out to be based on some mistake. You can go back and check their math. It's right. The world should have ended like 4 weeks ago. No. Something happened that no one expected that no one thought was even possible. The world got a savior and it was the last person that you would guess. Yes, it was the general secretary himself, the party chairman, Chinese President Xi Jinping. [music] And if you're thinking, okay, why didn't

I hear about this? It's because China pulled it off basically in secret, which is kind of a weird way for an aspiring superpower to save the world. And it gets even weirder because the country they saved most of all is their chief rival, the United States. Well, today we are going to pull back the curtain on how China saved the world from the Iran oil shock. We're going to start by piecing together what China did that saved the world since it happened in secret. We're going to unravel how China did it because this should simply not have been possible to pull off, which will help us to answer why China did it, the theories for what was behind all this. And finally, we are going to look at what this changes in our global economic order. This is a crazy one, guys. This story is crazy. So, let's get into it. [music] Okay. So, to understand what China did, we're going to use the board to map out the global oil economy, what happened to it from the Iran war, and then what China did to save it from completely imploding. Good. So, the main thing about oil is it's traded in one unified global market. That means all the world's producers sell into the same big supply of oil which the world's consumers all buy from. And this is why when something happens in any part of the oil world like say a war in the Middle East, it affects everyone. And on any given day, there are about 100 million barrels moving through this [music] system. 100 million barrels produced every day. And that is also 100 million barrels that gets consumed every day. [music] And it's really important that these two numbers are the same. Every drop of oil that gets produced every day gets sold and consumed every day. There is zero slack in the [music] system. And that is

why it is such a big deal when the Iran war starts and Iran shuts down the straight of Hormuz. [music] And doing this, shutting down the straight of Remove blocks 20 million barrels of oil per day from reaching the world. [music] So now we've only got 80 million barrels a day in output to meet 100 million barrels a day in demand. Right? This equation no longer balances. [music] We now have a 20 million barrel a day deficit. And this [music] this deficit means that pretty soon 20% of the oil consuming world was going to power down. That's one in five flights, one in five factories, power plants. It's a global calamity. Still, the world is ready with a couple of defenses including [music] this oil pipelines that go around Tormuse. >> This is the east west pipeline known as Petrol Line. >> That big one is controlled by Saudi Arabia and then the United Arab Emirates controls the other main one. >> This is the Abu Dhabi crude oil pipeline. >> [music] >> And these pipelines add about 7 million barrels of oil back into the system. It's a lot. Okay, so now just to make sure we're keeping score, we're at a negative 13 million barrel a day deficit, [music] right? We removed 20 million barrels from the system. We added 7 million back in. 13 million deficit. It's better, but it's still really bad. Okay, so you guys are still with me. The other big defense that the world has is strategic petroleum reserves, emergency stockpiles of oil. [music] These tanks are all full of oil. America and other countries keep huge

stockpiles like this for emergencies. And they're even bigger US stocks. I can't show you because they're kept in huge salt caves thousands of feet underground. Tons of countries have these reserves. Here's Japan's one of the world's largest. A week into the war, 32 of these countries got together and all opened up their reserves to the world. This was the largest release of reserve oil in history. Hundreds of millions of barrels from dozens of countries. It was a huge deal. But the war dragged on and on and it was stretching out these releases. So in the end they added up to an average 2.5 million barrels per day. So these were the world's big defenses [music] for a mass oil shock like what happened in the Iran war. And together these bring our deficit down to 10 12 million barrels a day. This is still a calamity. More than a tenth of global energy usage. And it [music] gets worse. Those 32 emergency stockpiles from all over the world, they are running out. Here's America's reserve. It's dropping hard and fast towards zero. But here's Japan. It's same thing. Absolutely plunging. So, not only are these reserves tiny relative to the hole they have to fill, but they're only good for a few months and then they are gone, man. Which is exactly why everyone looked at all this and said, "Yeah, the world is ending." Until a few weeks in, people started to notice something weird happening. >> Good afternoon, everyone, or good morning or good evening or wherever you are. >> This is from a conference call a business intelligence firm called Kepler held back in April, walking its clients

through what was going on in the oil market. And they focused on one thing in particular, >> what's happening with China, right? So, I just want to look at China monthly imports right now. >> China's oil imports. That's those bars in the chart had suddenly dropped to half half. >> See, and how much long how long could that carry on? >> I know those guys did not seem super emotive about this. I, you know, market analysts, but trust me when I say this discovery made people lose their minds. And let me give you some context for why. This shows China's oil imports since 1980. And that rise is one of the biggest stories in the history of oil. This is where China surpassed the US as the world's biggest oil importer and just kept going. Oil has powered China's rise from the start. Fuels their factories, [music] lights their cities. It's the engine of their economy. Yes, China has been building lots of solar and wind, but renewables like that still produce just a [music] fraction of the power that they get from coal, gas, and especially oil. Which is why it seemed impossible that right after the Iran war started, China's imports that have been rising for decades dropped overnight by half. This decline [music] here, 5 12 million barrels a day is equivalent to more than all of India's oil imports. More than Europe's [music] five biggest economies combined. This was the thing that saved the world. China. China took its imports and magically cut it by 5 12 million barrels a day. Which means that what started as a 20 million barrel a day deficit from Hormuz's closing is now after all those alternate pipelines plus emergency stockpiles plus China doing whatever

it's doing means that deficit is now down to just 5 million barrels a day. And look, that's not great. That's still pretty serious. But everybody's shaving 5% off of their oil usage instead of 20% [music] is the difference between mass blackouts and economic collapse, which is what we thought we'd get, and a few months of higher gas prices, localized flight cancellations, and some gas lines in Southeast Asia, which is what we got instead. [music] So, yeah, I would call that basically saving the world really thanks to this guy. And before we go further, I want to thank our sponsor for enabling us to bring you this video. Sponsors are how we're able to do what we do. So, thank you to Outskll. And if you don't know outskll, helping you get smarter is actually what they do, too. If you feel like you need to know, want to know how to use the latest AI tools to get ahead in what viewers of this channel know is an increasingly competitive job market, or you know, some, but you want to know more. Outskill is offering its mastermind course this and every weekend, 10:00 a.m. to 7:00 p.m., 2 days. Lots of practical knowledge, expert mentoring, and real world tools. Outskill actually believes so much in this course that they are making it free to our viewers. Just use the link in the description to register. You'll learn deep research with Claude. Build artifacts and dashboards, create presentations, use Claude connectors to automate tasks, build custom agents, and generate videos and visuals. Look, I know AI it's a sensitive topic. I get it. We talk about it on the channel [music] and there are a lot of companies in this field I would not partner with. I partner with outskll because it's a service by and for human beings who however you we feel about this

technology [music] want to better learn how to wield it. It's why outskill's courses have already been attended by more than 10 million people. Sign up now and you also get as free bonuses a full AI prompt library, 50 secret cloud codes, and a personalized AI toolkit builder. So, if you're interested, you can sign up for free using the link in the QR code or in the video description. So, now let's get back to our story. But China has not said a thing, hasn't acknowledged they're doing this, hasn't said how or why, just stopped importing oil by the largest amount any country has ever stopped importing oil. Poof. overnight cold turkeyed this substance that the entire industrialized world [music] and China especially have made essential to their daily functioning for a hundred years. And since China won't tell us how they did this, we are just going to have [music] to piece it together ourselves. Starting with a quiet change China made right at the start of the war. This article from 2 weeks into the war revealed that China had ordered a total ban on fuel exports. The [music] context here is China has a huge refinery industry and what it does is it turns raw crude oil into stuff like jet fuel and gasoline [music] and most of those fuels stay within China but because they're good at it they export a bunch of it too all over Asia until March when China banned those refiners from exporting a drop of fuel and at the time everyone assumed this was to preempt a potential fuel shortage within China by building up stockpiles. One reason I say assume is that this ban was imposed that's right in secret. That's why the story is credited to four sources with knowledge of the matter. That means [music] off the record. But that assumption about why China was doing this was wrong. Turns out it wasn't to

stockpile jet fuel or gasoline. [music] It was because China was about to stop importing half of its oil. So those refineries were about to do a lot less refining. [music] So rough math, I'm going to say that accounts for cutting about half a million barrels in daily demand [music] out of the 5 12 million that China cut overall. Okay. >> [music] >> Next big move. And if you care about climate change or air quality, you're going to want to cover your ears here. Coal. This is from a few weeks before the war. Why China is building [music] so many coal plants. And it found that China commissioned more than 50 large scale plants last year alone. So once the war started, China spun a bunch of those plants online or pushed [music] its existing plants into overdrive or probably both. But by April, it was burning a record amount of coal. China also figured out a way to use coal instead of oil to make plastics, which usually is a petroleum product. They also found a way to use coal to make fertilizer, which usually also is an oil byproduct. All of which allowed them to, [music] say it with me, import less oil. And we're not sure the exact amount, but let's just say, and this is a guess, another half a million barrels. Now, [music] by all accounts, life remained completely normal within China, like even more so than it did in the United States, where gas [music] prices were crazy. But China did find some ways to nudge people to use less fossil fuels. According to this Wall Street Journal story, for example, [music] after Chinese airlines canled a bunch of internal flights, and air passenger

traffic declined about 6%. There was also a 5% rise in rail passenger traffic, meaning people just took the train. And by May, electric cars accounted for about a quarter of all vehicles on the road, up 33% from a year earlier. Now, China can't make and distribute 50 million new EVs overnight. But if you already got a large fleet in people's hands from years of subsidies, then when gas prices spike because, say it with me, China stopped importing oil, people with gas cars will start car pooling and their friend [music] Xiaomi SU7V, they'll start taking the train and gas consumption will go down. The effect of this one is hard to measure, but let's just call it another half a million barrels. Remember, that is more than half of all the oil that France imports. It is a lot. But we're still not really close to explaining all 5.5 million in China's disappearing [music] demand. And that's because we've got one big thing left. This is China's real secret [music] weapon. And it's something that we, the world, did not know about until now. It's in silos just like this. [music] This is a chart of the world's largest oil reserves at the start of the war before they got used up. But there's one country missing here, China. [music] And the size of China's oil reserve is, you guessed it, a state secret. But we can get a decent idea. These are some of China's crude oil silos. And the two main things to know about them are that they're really, really big, and that the domes on them go up and down based [music] on how full they are. All of which is fully visible from space. There are people whose whole job is to count those silos and how full they are to track how much oil China has saved up. They have more sophisticated ways to check those numbers, [music] too. But the silo counting works pretty well. And

those silos alone suggest China has 1.4 billion barrels saved up. That's more than every other country's stockpile added together. It would be enough to fill a 12t tank the size of Manhattan. And this is just the oil we know about. China also has oil stashed at factories and refineries around the country. and it's been building huge underground caverns to store oil away where no one can count it up. So actually, China might have way more than even the 1.4 [music] billion barrels that we can see, which means China could use up, let's say, 4 million barrels a day from those reserves and it would still take more than a year to run out and maybe even a lot more depending on how many of those caves it has. Now, I cannot tell you how crazy this is. India, for example, could live off of its stockpile for about 4 days. Europe's stockpile could serve it for maybe 10 or 20 days. And the US stockpile, which took decades to build up and is the envy of the world, would be good for 60 days, which is why even with the US still importing from all sorts of sources outside the Middle East, Trump cried uncle 3 months into the war. So, you can understand the shock waves it sent when it turned out China, the world's biggest oil consumer, had saved up so much it could cut itself off in the world like this without breaking a sweat. But this raises a whole other question. How did China store away this secret and impossibly huge universe of oil, a Manhattan of oil? Where did it all come from? And there are basically two answers to this. In number one is Iran, and in number two is Russia. [music] Let me explain. >> The Iran and Libya sanctions bill I signed today will help to deny those countries the money they need to finance international terrorism.

>> 1996, President Bill Clinton signs a law cutting off the world from buying Iranian oil. We'll get to how in a second. 2022, Russia invades Ukraine and the head of the European Union makes a big announcement. >> So today we will propose to ban all Russian oil from Europe, >> which the US and other big countries joined. All of which did, you know, it's easier actually if I show you on the board. [music] So two of the world's biggest oil producers, Russia and Iran, were mostly cut off from this global oil market. All that oil slloshing around, stuck with nowhere to go, nowhere to buy it. But wouldn't you know it, bit by bit, actually let me show you this too on the board, China found a way to get all that forbidden Iranian and Russian oil. This is a report by a think tank called the Atlantic Council tracking [music] China's secret oil trade with Iran and Russia. And they did it by using dark fleet [music] tankers that operate outside of maritime laws and obscure the operations. They rebrand the oil as Malaysian, funnel it through small independent refineries called teapotss, and then route the money via smaller back alley financial institutions with names like Bank of Kundo. But okay, if the world knows China is doing this, and all of this oil is supposedly under global economic sanctions that make it forbidden to buy it, then how does China get away with it? Well, it's by using their other secret weapon, this China's currency, the reni, the yuan. >> [music] >> And the reason that this works, that it's a magic hack, is because of something I didn't tell you about earlier about this global oil market. All of it, all of this oil is traded [music] in this US dollar.

Couple of fine fellas we got up here on the board. All of the sales, all of the purchases, it's all in US dollars. And the reason for this is that oil trades, remember, happened between countries. But it would be chaos if every country paid every other country in a different currency. Nobody would know what the real price was and oil exporters would be stuck with this grabag of a 100 foreign currencies that they wouldn't be able to use. But everybody can use US dollars. Everybody wants US dollars. [music] They're a safe way to save your country's oil revenues because the dollar is stable. Every other country accepts it in [music] trade. And trading all in one currency means there's just one price, which is what you need for a unified global market to function. But this gives the US a lot of power because trading in US dollars means those transactions have to be processed by a US-based bank, which means the US government can tell those banks to block oil trades with any country it doesn't like. People truly do not realize how much US [music] global power comes from these little green backs. But this means China and Russia and Iran were able to bypass [music] this whole system by using a different currency, China's currency, to process the sales. This makes these oil trades basically invisible to the US financial system and therefore the US government, which means the US can't block it from [music] happening. And if you're wondering why more countries don't do this kind of thing, it's because they don't have a currency Iran or Russia or whoever would want. The remov can't do everything the dollar can do, but it can buy stuff from China, and China is the world's largest exporter of stuff. So that currency is still useful enough for Iran and Russia

to go to the trouble. Probably the only other currencies in the world valuable enough to do this are the Japanese yen and the euro. But Japan and the European Union are big supporters of sanctions on Iran and Russia. So they wouldn't want to do this. So it is really just China that can pull this off. And being the only willing buyer of Iran and Russia's oil means they get a big big discount. Which is how they were able to quietly stock up a billion plus barrels of probably mostly Iran and Russian oil so they could magically stop importing enough oil for enough time to basically save the world. So that is how China saved you, me, the global economy, and especially the United States and Donald Trump from the largest oil shock in history. But that still leaves us the question of why? Like I'm more curious than ever. Why? Why would they bail us out? And why would they do it in total silence? And to answer this, we are going to need the other side of the board. So we're going to use the board to go through four theories for why China did this that I think all have some merit and some evidence to them. But first, I want to rule out two that I think don't scan. Number one, probably the one you've been shouting at your screen for the last 10 minutes because it seems so obvious, is that China did this. China stopped importing oil just to protect themselves from high oil prices. But you know what? This one doesn't hold up. Here's why. And one number, $74. That is the average replacement price on China's oil reserves that they have been burning up. [music] Here's the price of oil over the last 6 months. And here's where the price dropped below $74. If China was just trying to protect itself from price shocks, this is the point that they

would have started buying again. They would have actually made a profit by buying at this price. But they didn't. They just kept burning reserves, which means they had some other motive, right? So, second wrong theory we need to rule out. This was all a soft power play for global goodwill. I'm sorry about the panda. I know it's a total cliche. When you Google image search Chinese soft power, this is the first thing that comes up. So, I don't know. I went with it. Anyway, it's also wrong. This soft power theory does not square with China's big ban against its refineries exporting jet fuel or gasoline because this really hurt the neighbors in Asia who count on China for that stuff and are the exact countries China most wants to improve its standing with. For another thing, remember China did all this and didn't talk about it. If you save the world to make countries like you, wouldn't you, I don't know, mention it at least once instead of hiding it in secrecy? So these theories, I think these are out. So now let's look at the theories that do make sense. Starting with the big one, Taiwan. [music] Here's Asia. And here's the straight of Hormuz, which we learned controls 20% of the world's oil flows. And now this is the straight of Mala. Even narrower, even easier to close. The ships that go through here carry 80% of all China's oil. And in any worse scenario with Taiwan, one of the very first things that happens [music] is the US uses its naval supremacy to close Mala like Iran closed Harmuz, shutting off China from outside oil and bringing China to its knees. [music] So yeah, pretty powerful, right? Defeat China without ever coming within a thousand miles of it. And this has obsessed China's leaders for decades.

They actually have a name for it. They call it the Malaa dilemma. And it applies to any war scenario with the US. But Taiwan is probably the likeliest. So, how can you neutralize the threat of suddenly losing access to outside oil? Well, one way is to build up renewable power sources like wind and solar, which, yeah, check, China [music] has been doing. Another is burning more coal. Check. But the best way is to stockpile so much oil in advance that you can go without imports for a year and keep the lights on for as long as the war takes. [music] Under this theory, China had this whole no oil plan ready in case of war. But they pulled it off now both because they could and maybe as a little demonstration to the US and Taiwan that the Malaa problem is kind of solved just to threaten them anymore. So don't expect them to hold them back. Okay, ready for theory number two? Leverage with Donald Trump. Trump and she actually just had a big one-on-one summit in May. And you know, watching this, it's not hard to imagine she telling him, "Hey, Donald, I'm single-handedly saving your economy right now by absorbing the oil shock so it doesn't hit the United States. So, you want me to keep this up? You better make it worth my while because he knows if there's one thing Trump has shown he's sensitive to, [music] it's the price of oil. Now, nobody can prove this happened. Yeah, a few weeks beforehand, the US did withdraw a bunch of missile defense and other weapons from China's periphery, which China liked to use in the Middle East, but that might be a coincidence. I would consider this the softest theory. Still, as long as the war goes on, Xiinping really could nuke the US [music] economy anytime he wants by resuming Chinese oil imports and exhausting global supplies. Did he remind Trump of that fact when they met?

You know, we don't know. If you're still watching, you probably want to understand the world better. And so do the thousands of members of our club called New Press. New Press is where smart, curious people get a deeper version of what we do across our channels. In-depth interviews with the experts we speak to, conversations between creators, and the ability to connect directly with other members to talk about what's going on in the world with other smart, curious people. Right now, it's 60 bucks a year to become a founding [music] member. That money goes directly to supporting this work. Your subscription also includes access to, among other things, a podcast Johnny and is are launching this week, as well as an exclusive video series I'm doing and been doing for a while there that I'm really excited [music] about. No Dumb Questions, where I answer big questions about the world submitted by viewers like you. In this week's I take on a bunch of questions about China's [music] rise as a world power, like how did China and the US become adversaries in the first place? What is China's ultimate endgame as a [music] great power? What does it want? And a lot more. You can check it out at newpress.com/quests and the link is in the description. Now, let's get back to it. Okay, theory number three, and I'm pretty partial to this one. Protecting China's export-based economy. China's economy, like we said, centers on manufacturing and exporting basically everything in the world. [music] Here's every country China exports to, scaled by overall value. Now, let's cross out all the countries whose economy would implode in a sustained oil shock. This one? This one? Probably these guys. Definitely the

Europeans. Yep. Here. Okay. Well, China just lost half of its export market and a bunch of its economy with it. [music] Or that's what would have happened if China hadn't propped everyone up for 3 months by absorbing the oil shock. Now, I can't prove that's why they did it, but I do think it would make a lot of sense. Okay, theory number four. They did this to prove to the world that China now controls the global price of oil. I had to print this out of my home printer because the photo printer stopped working. That's why the Chinese flag is purple. I don't know. My apologies to China. [music] Credit for this theory goes to a Bloomberg columnist named Javier Bloss who argued this was China unveiling its powerful new oil price weapon. He compares it to the 1973 oil shock when Arab oil states like Saudi Arabia and some others shut off oil to the US, a power that got termed the Arab oil weapon and made those states a global player ever since. And he argues that yeah, on some level this was probably about Taiwan and Malaka. But if China proved that it can flip 5% of the world's oil demand on and off like a switch, that gives them Saudi Arabia level influence over the world's most valuable resource, which gives them a lot of leverage over any country that buys a lot of oil or that sells a lot of oil, which is pretty much all of them. I think there's probably some truth to all four of these series, right? I don't think they're mutually exclusive. Now, we don't know enough. We can't peer inside Xiinping's head and know like which one is the truest. But I think if you look at these four together, you have a pretty good understanding of why China did this. So, okay. So, the question now is what does all this add up to? What does it change about our world? And we the world learned a few

new things here. One, China has neutralized the so-called Malaa dilemma that would have allowed the US Navy to shut down their economy. And that makes war with the US more bearable for China. and an invasion [music] of Taiwan, therefore more likely. And two, China now has a lot of control over global oil prices. Although I don't think we yet know how they would use that power, except how they did here to blunt a global oil shock. But you know, the Iran war is still a little low boil, which means as long as Hormuz is at threat of closing or partially closed, Xiinping has a lot of leverage over the United States. He has that button on his desk that [music] says nuke US economy. And along those lines, the US, China's big rival, it came out of this war weakened on the world stage in a lot of different ways that we talked about [music] in the last video. Russia, meanwhile, is still mired in Ukraine. That means that among the major world powers, China is looking pretty good right now, which is part of why there is a growing consensus that the war's real winner was China. China won. They're the winner. China's the big winner here. [music] China wins. This is a little too clever. I think Iran won the Iran war, but China did win something very, very big. And it's easy to explain if I put it on the board for you. So, forever and ever, these have been the three world powers of oil for like the last century. The US, Saudi Arabia, Russia. They are the three biggest producers in the world by far. The US guarantees free flow of oil in the world's oceans and controls the US dollar. Saudi Arabia is the de facto leader of OPEC, the alliance of oil producing states. And Russia, in addition to being a world power and a huge exporter, controls land-based oil

flows across a bunch of Europe and Asia. But this era might be over or at least starting to end. The US proved in the Iran war that it cannot guarantee the global free flow of oil anymore. And Russia is under global sanction and can barely sell its own oil. So these two powers might be out. [music] And who displaced them? Well, arguably one of them is Iran, which is not the world's biggest producer. They're ranked seventh, [music] but they prove that they can unilaterally turn on or off 20% of the world's oil supply, and [music] nobody can stop them. And the other new global oil power, I think you know where this is going. I think you can make an argument for China. You know, they kind of control the price of oil now, or at least have huge influence over it, because they [music] can switch 5% of global demand on and off, and because they were able to do what the United [music] States wasn't in this war, and secure sufficient flows of the world's most important resource, [music] single-handedly saving the oil burning world from disaster. That sounds like the behavior of a global oil power to me. Now, [music] I don't know what China wants to do with that power. I mean, we have some educated guesses, obviously, but [music] they're not telling us. They might not even know. They might have themselves just discovered how powerful they are here, right along with the rest of us. But one thing is for sure. Now that they have this power, they've demonstrated [music] it, they've proven to the world that they have it, I am certain this will not be the last time that we see it deployed. [music] D. [music] >> [music]