Is Trump’s America trying to outdo the Opec cartel on oil clout? Here’s why this game won’t work

Combine Trump’s supposed hegemony over the Americas since the capture of former Venezuelan President Nicolás Maduro on 3 January with control over a post-revolution Iran, and you’re at about 42% of global oil production. Add to that the fact that China is the biggest importer of both Venezuelan and Iranian oil, and Beijing suddenly looks vulnerable.

Not so fast. The bigger lesson from Washington’s actions in Venezuela and from any hypothetical backing of regime change in Iran is that diplomatic actions may change leaders, but they rarely alter the underlying relationships between oil producers and their customers. Such trade relationships, in turn, influence diplomatic alliances. Since World War II, politicians who’ve sought to control these flows have almost always failed.

As we’ve noted before, China will be central to the next act in Venezuela’s drama. Beijing plays a similar if not more important role for Iran, and it’s one that is unlikely to be diminished by Trump’s latest efforts in the global theatre of geopolitics.

Even if relations with the US or other Western powers were to improve under a different leadership in Tehran— a very big if —Iran is unlikely to abandon its strategic alignment with China. The two are tied together in a loose web of diplomatic, economic and security networks. They have participated in military exercises and in 2021 signed a pact outlining $400 billion of potential Chinese investments over 25 years, providing a lifeline for Iran in the face of international sanctions.

Chinese President Xi Jinping has been a huge backer of Tehran’s Global South ambitions, encouraging it to join the Shanghai Cooperation Organization in 2023. China also supported its accession to the expanded Brics bloc. Last week, warships from Iran, China, South Africa and the UAE joined naval exercises off the coast of South Africa.

Pragmatism defines much of Beijing’s relationship with Tehran. Chinese officials this week reaffirmed their long-standing position of backing stability in Iran, but nothing beyond a few words of concern in response to protests that have posed the biggest challenge to the Islamic Republic since it was founded back in 1979.

Beijing has its own problems with imposing geopolitical hegemony through military means, of course. It has adopted an aggressive stance across the region, most overtly, perhaps, towards Taiwan. That hardly makes it a paragon of a rules-based order and multilateral approach to international affairs.

Still, Trump’s own swagger, made real in US foreign policy, has given China an opportunity to paint America as an unreliable and predatory force in the world and itself as the rational actor.

There is also historical precedent for why a longer-term chill between Tehran and Beijing on the oil front is unlikely. For all the fears of petroleum being used as a geopolitical weapon, occasions when fossil fuel producers have frozen out their customers for political reasons are few and far between. The 1973 Arab oil embargo is a rare exception, but the failure of its stated aim—to end Western oil importers’ military support for Israel—illustrates why most have tended to steer clear of ideological fights.

The US continued importing oil from Iran on and off for eight years after the Islamic Revolution and the EU will not completely phase out Russian gas imports until late next year, five years after Moscow invaded Ukraine. Far from getting shut out of Venezuela’s post-Maduro oil exports, China is already being lined up as a principal customer by commodity traders Trafigura Group and Vitol Group.

Expect more of the same in the coming months. Once upon a time, US restrictions on Asian oil trade could bring an aspiring hegemon to its knees. Such leverage is beyond Trump’s grasp now. Russia is the only country that provides more than 10% of China’s crude and most major suppliers are aspiring middle powers that won’t be easily persuaded to do his bidding.

A switch away from oil is another way of diversifying supplies: Electric cars and trucks will eliminate about 1.76 million barrels of Chinese oil demand this year, roughly equivalent to every barrel imported from Iran and Venezuela put together.

This slippery liquid always finds its level and can seep through the narrowest cracks to connect buyers with sellers. If you’re betting that the law of trade and geopolitics has been upended, you may find yourself disappointed. ©Bloomberg

The author is a Bloomberg Opinion columnist covering Asia politics with a special focus on China.