The United States has called on China to ensure the Strait of Hormuz remains open amid rising tensions in the Middle East, warning of severe economic consequences if Iran moves ahead with plans to block the crucial waterway.
US Secretary of State Marco Rubio made the appeal during an interview with Fox News on Sunday, saying, “I encourage the Chinese government in Beijing to call them (Iran) about that, because they heavily depend on the Straits of Hormuz for their oil.”
Rubio’s comments followed a report by Iran’s state-run Press TV which claimed that the Iranian parliament had approved a plan to close the Strait. However, the final decision rests with the country’s Supreme National Security Council.
“If they [close the Straits]... it will be economic suicide for them. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours,” Rubio added.
The Strait of Hormuz is a vital chokepoint for global energy supplies, with around 20% of the world’s oil passing through the narrow waterway. Major oil and gas producers in the Middle East rely on the route to transport energy to global markets.
Any disruption in operations could send oil prices soaring. The price of Brent crude surged to $78.89 per barrel late Sunday – the highest level in five months – after the US launched strikes on Iranian nuclear facilities.
“The US is now positioned with an overwhelming defence posture in the region to be prepared for any Iran counter attacks. But the risk for oil prices is the situation could escalate severely further,” said Saul Kavonic, Head of Energy Research at MST Financial.
Iranian parliament votes to close Strait of Hormuz following US strikes
The price of crude oil directly affects consumer goods and services, including fuel and food costs.
China, the world’s largest buyer of Iranian oil, imported over 1.8 million barrels per day from Iran last month, according to data from ship-tracking firm Vortexa. Other Asian economies, including India, Japan, and South Korea, also depend heavily on oil that transits through the Strait.
Energy analyst Vandana Hari said Iran had “little to gain and too much to lose” by closing the Strait.
“Iran risks turning its oil and gas producing neighbours in the Gulf into enemies and invoking the ire of its key market China by disrupting traffic in the Strait,” Hari told BBC News.
Tensions escalated further over the weekend after the US entered the conflict between Iran and Israel. President Donald Trump claimed Washington had “obliterated” key Iranian nuclear sites. However, the UN’s nuclear watchdog said it was unable to assess the damage at the fortified Fordo underground facility. Iran stated that the damage to Fordo was only minor.
Meanwhile, Beijing criticised the US strikes, saying they had damaged Washington’s credibility and urged for an immediate ceasefire.
China’s UN Ambassador Fu Cong called on all parties to restrain “the impulse of force... and adding fuel to the fire”, according to a report by state-run broadcaster CCTV.
An editorial in China’s state-run Global Times also said US involvement had “further complicated and destabilised the Middle East situation” and warned that it was pushing the conflict to an “uncontrollable state”.
Source: With inputs from BBC, agencies