U.S. Treasury Secretary Scott Bessent criticized China for being an unreliable global partner during the ongoing Middle East war, specifically accusing Beijing of hoarding oil supplies and limiting exports of certain goods, actions reminiscent of its behavior during the COVID-19 pandemic and rare earth export threats last year [1]. Bessent highlighted that China has continued to purchase and stockpile oil, despite already having a strategic petroleum reserve comparable in size to the entire reserve held by the 32-member International Energy Agency [1]. He noted that China had been buying more than 90% of Iranian oil, which constituted about 8% of its annual purchases, but the U.S. military blockade of Iranian ports would prevent Chinese ships from accessing Iranian oil [1]. Oil prices surged over $100 per barrel following the blockade, with no sign of a swift reopening of the Strait of Hormuz, which carries 20% of the world's oil [1].
Former U.S. Treasury Secretary Hank Paulson echoed concerns about the impact of the Iran conflict on U.S.-China relations, warning that the upcoming meeting between President Donald Trump and Chinese President Xi Jinping in May may not occur if hostilities persist [2]. Paulson emphasized a "huge trust deficit" between the two nations, describing their relationship as "mutually assured economic disruption" due to deep economic integration and intense competition [2]. He noted that China has criticized the U.S. naval blockade on Iranian ports, calling it irresponsible and dangerous [2]. The Treasury Department has also sent letters to banks in Oman, the UAE, and China, warning them about illicit dealings with Iran [2].
Paulson predicted that if the Trump-Xi meeting proceeds, it will focus on stability, mechanisms for managing trade, and establishing guardrails to prevent escalation into a trade war [2]. He stressed that no country can afford a trade war at this time and that the U.S. economy is better positioned to withstand the oil price shock than others, though disruptions elsewhere could spill over into the U.S. economy [2].
Both sources highlight the significant market impact of the Iran conflict, particularly the surge in oil prices and supply chain disruptions. The International Monetary Fund, World Bank, and International Energy Agency have urged countries to avoid hoarding energy supplies and imposing export controls, warning that such actions could exacerbate what they describe as the biggest shock ever to the global energy market, though they did not name specific countries [1].
CONCLUSION
The ongoing conflict in Iran and accusations of oil hoarding by China have heightened tensions between the U.S. and China, with both sides expressing concerns about economic and geopolitical stability. The surge in oil prices and supply chain disruptions signal a high market impact, and the outcome of the planned Trump-Xi meeting remains uncertain amid a deep trust deficit. Both articles underscore the need for mechanisms to manage trade and prevent further escalation.