The blockage of the Street of Hormuz threw the world into a fuel crisis, while China was able to fend off most of the effects. China veteran Kaiser Kuo explains how the strategy of electrification offered a way for China to avoid the spike in fuel prices, although it is not clear if other countries can copy this strategy, he explains at the World Economic Forum.
Kaiser Kuo:
The conflict that erupted at the end of February 2026 was, among other things, an energy shock. Nine weeks of disruption in and around the Strait of Hormuz pushed Brent to nearly $120 a barrel, sent liquefied natural gas (LNG) prices to multi-year highs, and forced governments to confront the fragility of supply chains they had spent the post-COVID years assuming were secure. The shock exposed which economies had built genuine resilience into their energy systems, and which had merely diversified their suppliers of imported hydrocarbons.
On paper, China should have been among the most exposed economies. Columbia’s Center on Global Energy Policy has noted that roughly 45-50% of its crude imports transit Hormuz, and nearly a third of its LNG comes from the Gulf. But China’s economy proved considerably more insulated than those numbers would predict. Goldman Sachs trimmed its 2026 growth forecast for the country by only 0.2 percentage points – the smallest downgrade in the Asia-Pacific region.
More at the World Economic Forum.
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