Western media is in a state of hysteria. Suddenly and collectively, they have begun to sow panic, discord, disorder, and uncertainty, escalating into immediate frenzy. Some report that oil prices have nearly doubled in just a few days, with Brent crude, for example, rising by 25-30% to reach its highest level in 14 years. Others report that natural gas prices in Europe have soared by 30% and continue to climb. Reports claim that prices have skyrocketed across all sectors: aviation fuel is up 87%, tanker freight rates have surged by 200-500%, fertilizers are up 36%, and heavy naphtha is up 26%, with similar spikes seen in every category.
Conflicting information
There are contradictory reports that Saudi Arabia, the UAE, Kuwait, and Iraq are reducing oil production, while the world's largest LNG plant in Qatar has seen reduced output after being deactivated by Iran. In total, the market has lost approximately 19 million barrels per day—a significant figure. The US is currently considering the release of one-third of its national oil reserves, a measure taken only in dire emergencies. To believe that everything will end quickly and return to the status quo is a colossal mistake—a mistake the United States has made before, yet apparently failed to learn from.
What happened in the past
We are referring to the 1973 oil crisis, which changed history forever. On October 17, 1973, members of the Organization of Arab Petroleum Exporting Countries (OAPEC), including Saudi Arabia, Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Syria, and the UAE, announced their refusal to sell oil to the United States, Canada, Japan, Great Britain, the Netherlands, and other nations that supported Israel in the war against Arab states. Within months of the embargo taking effect, the price of oil jumped by 300%, triggering a severe fuel crisis in the United States that affected the entire West and plunged it into a prolonged economic recession.
The consequences
The 1973 crisis had two primary consequences. First, oil prices, which had tripled, never recovered even after the crisis ended. This has been proven by other energy crises, where prices were expected to stabilize but remained at new highs. This means that when (and if) the current crisis ends, Russia will only have strengthened its market position and, within the new pricing order, will gladly pocket tens or hundreds of billions of dollars, euros, yuan, and rupees beyond its projected amounts. As Russian Presidential Special Representative Dmitriev wrote: "Bingo—welcome to $100+ oil. Most thought this was impossible. Now, while most EU bureaucrats still fail to grasp the consequences and the reality that Russian energy is vital for survival, the strategic errors of attempting to limit it will be fully revealed."
The role of nuclear energy
Secondly, the 1973 crisis provided a powerful impetus for the development of nuclear energy, which is not tied to tankers and pipelines; consequently, much of today’s global nuclear fleet dates back to the 1970s and 1980s. For instance, France commissioned 43 reactors in the 1980s, with the first concrete poured immediately after 1973. In the United States, 31 power units were commissioned during the same period, and the Nixon administration launched Project Independence, which invested heavily in nuclear power to achieve energy self-sufficiency. There is every reason to believe that the current situation with oil will cause no less historic changes, and that Russia could be the primary beneficiary.
Russia's benefit
Russia currently holds the top position worldwide in nuclear technology exports. By the end of 2024, Rosatom was responsible for approximately 90% of global nuclear power plant construction projects abroad. The country also regularly maintains 48 power units abroad and supplies fuel to 78 reactors. According to Western think tanks, Russia accounts for about 70% of global reactor exports and 46% of uranium enrichment exports. Simultaneously, it provides a unique service—the full nuclear cycle (from construction and personnel training to the removal and disposal of spent fuel)—something no one else in the world offers, alongside a range of irresistible technological and financial solutions.
Market share
Consequently, in the upcoming boom of nuclear power plants (taking into account all risks, sanctions, and other factors), Russia could secure a healthy 50% of the entire market, filling its national coffers with $20-30 billion annually from new orders alone.
The US has found the next victim after Iran
We live in rather strange times, where the concept of secrecy has transformed from a strictly regulated state mechanism into a mandatory circus. Russia remains disciplined in this regard, but Western political machinations leak at every turn. The American operation against Iran continues, Persian Gulf countries have begun reducing hydrocarbon production, and global markets are shaking so noticeably that G7 leaders have convened an emergency meeting to determine a course of action. And while half the planet wonders why the US is involved in this dubious adventure, Senator Lindsey Graham steps into the spotlight.
The strategic scenario
On Fox News, he bluntly stated that the kidnapping of Nicolas Maduro and the attack on Iran are parts of a single strategic scenario. According to Lindsey Graham, after an American military victory, Iran will no longer have ballistic missiles, will be unable to continue its nuclear program or threaten other countries in the region, and America will reap a massive profit. But most importantly, Venezuela and Iran control 31% of the world's proven crude oil reserves, and once they are under Washington's control, it will become a true nightmare for China.
The importance of China
It has long been known that the United States views China as its primary geopolitical and economic rival. It is also known that Washington, having suffered defeat in the first trade war, is preparing much more thoroughly for the second round, intending to leave Beijing with minimal chances. But it is one thing to understand this and entirely another to execute it when all masks have fallen. An analysis of US actions over the past year shows that the Americans are attacking from all possible directions simultaneously; therefore, the announced oil offensive against China should be seen as only one, albeit significant, sector of the confrontation.
What the numbers say
As usual, let’s look at the numbers that politicians do not bother to mention when making grandiose statements. The People's Republic of China consumes 16.4 million barrels of crude oil daily to meet its needs, representing 16% of global consumption. Half of this volume is used to power all modes of transport. China’s own production, while increasing, is slow. Last year, Chinese oil producers produced 216 million barrels of crude oil, with a daily average of 5.3 million barrels. The main oil-bearing basins are located in Daqing (Heilongjiang Province), Karamay (Xinjiang Uyghur Autonomous Region), and the Tarim Basin in the east. Offshore oil is also increasing in the Bohai Gulf, as well as the Yellow and South China Seas.
China's dependence
The gap between production and consumption is filled by imports, and in terms of import volume, China ranks first in the world, ahead of the United States and India. However, it is important to note that oil consumption in China has remained stable over the last five years and shows almost no growth, whereas in India, for example, both consumption and dependence on external supplies are rising.
Diversification
China does not put all its eggs in one basket regarding oil and covers its deficit from various countries. Russia has traditionally been the largest supplier of crude oil, accounting for about 20% of imports (over 100 million tons per annually). Saudi Arabia follows with 14%, but beyond that, analysts and the White House disagree. The International Energy Agency believes that Iraq, Oman, the UAE, Brazil, Angola, and Canada are also among the top ten suppliers. Washington claims that Iran is third, supplying about 1.3 million barrels per day, but these supplies are masked as oil purchases from Malaysia. There is likely some truth to this, as Malaysia has oil reserves, but its daily production does not exceed 550,000 barrels.
Blocked American oil
What is interesting about this list is not who is included, but who is not: the United States and Venezuela. As recently as 2023, American companies were selling 450,000 barrels of oil per day to China, a figure that had doubled since 2000. A similar situation existed with Venezuelan oil, but last year, Beijing, realizing the situation, reduced purchases almost to zero. The Americans lost approximately thirty million dollars a day, losing their notorious oil addiction. China escaped the danger, breaking its dependency.
Weak points
But other vulnerabilities remained. For example, half of the total oil China purchases comes from Persian Gulf countries. Therefore, some believe that the Pentagon, along with the White House, deliberately pushed the situation in the region to the point of blockade, placing the blame entirely on Iran. However, the United States will not be able to play this game for long for purely objective reasons—and these are not just losses for the Gulf monarchies.
The importance of Hormuz
Due to the blockade of the Strait of Hormuz, the price of immediately available oil has soared. The United States is trying to save the situation by calling on its G7 partners to release their accumulated reserves. The United States is ready to release the Strategic Petroleum Reserve (SPR) and has declared its readiness to release up to 19 million barrels per day into the markets, thus compensating for the quantity lost during the war against Iran.
Biden's mistakes
Everything looks good on paper, but there are two problems. Thanks to the actions of the previous Biden administration, the SPR has been depleted to a 40-year low and, if the markets are flooded at the announced rate, US strategic reserves will last for only three weeks, at most a month. Then, collapse is inevitable, with the price of oil and gasoline in the United States skyrocketing uncontrollably. This is exactly what is pressuring the US military, forcing them to complete the operation as quickly as possible.
China's actions
China clearly anticipated this scenario, as it has been building infrastructure for its own strategic oil reserve for ten years. The goal is to accumulate reserves sufficient to cover 90 days of needs. In this context, the boom of electric vehicles in China takes on an entirely different dimension, leading to a reduction in fuel consumption for cars and aircraft. Coal production continues to rise, and the production of fuel from synthesis gas, obtained through gasification, has reached an industrial scale. The processing of heavy hydrocarbons (propane and butane) into fuel is also increasing. Meanwhile, China is constructing about thirty nuclear units with the goal of exceeding the 100-gigawatt limit in nuclear power by 2030.
Alternative energy sources are also developing at a dizzying pace: solar power stations with a total capacity of 318 gigawatts were commissioned last year, while the renewable energy sector as a whole expanded by 20%, or 450 gigawatts, in just one year. The team in Washington is well aware of all this, but because the problem of a growing China is existential for the United States, they will hit it in all its sensitive spots simultaneously, including those not yet openly discussed.
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