Trump’s Hormuz blockade tests U.S. ties with China and India

The U.S. blockade of the Strait of Hormuz is not only squeezing Iran but also ratcheting up pressure on two of its most consequential relationships in Asia — India and China.

With roughly 98% of Iranian oil exports bound for China, and a summit between President Donald Trump and Chinese leader Xi Jinping weeks away, Washington’s maximum pressure campaign on Iran risks destabilizing the fragile detente that the administration has carefully cultivated with Beijing.

India, with its complicated ties with the U.S., is increasingly finding U.S. policy at odds with its economic interests — most acutely in the energy shock now rippling through its economy.

Trump is scheduled to visit China in mid-May, and the administration signaled repeatedly in recent weeks that it wants the bilateral relationship stable enough to keep the high-stakes meeting on track.

“The Iran conflict, particularly the blockade, may upend this effort,” said Wendy Cutler, vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.

Signs of friction are already emerging. Beijing, which had kept its stance on Trump’s blockade largely restrained, appeared to harden its tone on Tuesday. Foreign Ministry spokesperson Guo Jiakun slammed the move as “dangerous and irresponsible,” and it will only “exacerbate tensions.”

More than a month into the war, Trump pulled a familiar playbook when he threatened to hit China with a 50% tariff if Beijing supplies weapons to Iran. Beijing pushed back, with Guo rejecting what he called “groundless smears and malicious linkage.”

“China will resolutely retaliate with countermeasures against any U.S. attempt to use weapons sales as a pretext for additional tariffs,” Guo said.

India, in the meantime, is facing a different type of pressure. Its heavy reliance on imported energy has left it increasingly exposed to the economic fallout from the conflict.

Earlier this month, India resumed purchases of Iranian oil and gas after a seven-year hiatus, having secured safe passage for its ships through the strait from Tehran, under a temporary U.S. waiver.

Indian Prime Minister Narendra Modi, after a nearly 40-minute call with Trump on Tuesday, said the two leaders had a “useful exchange of views” on the Middle East conflict and that India “supports de-escalation and restoration of peace at the earliest.”

Even if Washington carves out special provisions for India, they are unlikely to cover the full scale of New Delhi’s gas needs, said Arpit Chaturvedi, South Asia geopolitical risk advisor at consultancy Teneo.

As the U.S. blockade takes hold, India will likely halt its crude imports from Iran, said Chaturvedi, otherwise “we will see the relationship between New Delhi and Washington deteriorate.”

For now, “there is no incentive for India to risk its relationship with Washington any further, and bring [it] close to a point of no return,” Chaturvedi added. 

The impact of the energy shock, however, is hitting the two Asian economies differently.

China’s exposure to the energy shock remains more manageable than that of other major economies due to its massive oil stockpiles and diversified energy mix.

The scale of Iranian flows still reaching China also underscores how structurally intact Tehran’s oil trade remains. Maritime intelligence firm Windward estimates roughly 157.7 million barrels of Iranian crude were at sea as of Tuesday, with nearly 98% of them destined for China.

China’s strategic and commercial oil stocks, combined with barrels in transit, cover well over 120 days of net imports, said Dan Wang, China director at Eurasia Group. “If only Iranian barrels are lost, China can absorb the shock by diversifying to other sources and falling back more to coal,” she added.

U.S. Treasury Secretary Scott Bessent on Tuesday reportedly accused China of being an “unreliable global partner” during the conflict, criticizing Beijing for hoarding oil supplies instead of easing the global crunch.

India, by contrast, has no comparable buffer. As the world’s third-largest oil importer, India’s net inflows amount to 3.5% of GDP, leaving it among the most vulnerable economies to the blockade, said Sumedha Dasgupta, senior economist at the Economist Intelligence Unit.

With oil supplies covering less than 60 days, New Delhi faces a far harder landing if Middle East flows are disrupted further.

The situation is particularly acute for liquefied petroleum gas, a key cooking and heating fuel for households and commercial establishments. India holds no meaningful strategic LPG reserves and stockpiles held by refiners and distributors could cover only two to three weeks of demand if imports stall, Dasgupta said.

Nearly all of India’s LPG imports came mainly from the Middle East and accounted for about 66% of demand last year.

The odds for a sharp countermove from Beijing and New Delhi that could quickly sour their ties with the U.S. also remain low, analysts say.

The blockade — similar to the “Liberation Day” tariffs — is non-discriminatory and applies to all buyers of sanctioned Iranian crude, rather than singling out China, said Wang. “Beijing will protest at the diplomatic level, but is unlikely to overreact with major retaliation.”

India, meanwhile, is likely to shift energy imports away from Iran once Washington’s waiver expires, turning instead to Russia, the U.S., Australia, and other suppliers, Chaturvedi said.

“Modi is unlikely to cross any red lines drawn by Trump,” he added.

Still, any miscalculation or direct confrontation at sea could tip the diplomatic posturing into rapid deterioration and risk jeopardizing the fragile stability in the detente between Washington and Beijing.

“A U.S. interception of a Chinese vessel would likely become a major incident, [as] China will make a point of standing up to the U.S. in a situation like this,” said David Meale, head of China practice at Eurasia Group, leaving the relationship in a fundamentally different place than where they are now.

On Tuesday, a U.S.-sanctioned tanker linked to China sailed out of the Strait of Hormuz and into the Gulf of Oman, after Trump’s naval blockade came into effect.