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How China by not buying oil can keep oil prices low. China's reserves are full and even during April to June 18 during closure of Hormuz did not use oil stocks. It appears that China simply cut the use of oil, increased renewable energy and used coal supplies. This has relieved pressure on oil prices. The US by increasing supplies and countries like China, India, Germany reducing their oil use will help prices of oil remain low in July 2026 compared to the surge to $125 during the first time Hormuz was closed in April-May 2026.

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Iran wants to suspend the Oman US route in Hormuz channel to control navigation- the US wants to keep it open for open seas navigation July 7 2026. 30-50 ships make it through Hormuz. US revokes Iran's oil shipment out of Hormuz as a result, and makes strikes on Iranian  missile launching facilities used to disrupt open seas navigation on the Omani side protected by the US. US tries to set back channels to IRGC military that controls Iran, but IRGC does not carry out regular ongoing talks, talking only at the pressure of the president of Iran working with Pakistan, Turkey and Qatar to convince IRGC authorites. China has reduced its need for the barrels coming out of Hormuz, may not go back to getting Hormuz barrels. UAE has found alternative routes to ship and increased supplies, Saudis doing the same. India and Japan looking for alternative sources of oil including US and Venezuelan supplies. Most of the buyers of Hormuz oil reluctant to go back to getting Hormuz barrels. In this sense the situation has changed, from when the war began. Oil prices could rise from $70 to $76 , and a bit more, but the old situation of Iran threatening oil supplies of the poorer developing countries of the world including China, India, Indonesia, Philippines, Sri Lanka, most of Asia and Latin America, African countries, countries that cannot afford oil prices of $100 is something the world does not need. And the tide is shifting to alternative supplies, conservation that adds enough barrels of oil as China and India, Japan, Germany, are doing, and the US also to some extent. By 2027 alternative supplies will have increased to pull the world out of this place called Hormuz, to where it becomes an insignificant source of unreliable supplies. ...

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Oil prices expected to drop from $70 per barrel to $60 per barrel in July 2026 easing oil crisis in advanced and developing nations. A drawdown of inventories by 163 million barrels happened to OECD countries in the 4 months of the Hormuz crisis. Advanced European nations will replenish their inventories starting in the 4th quarter, the US next year in 2027, China with a billion barrels in inventory is not in a hurry to replenish at this time. Factors improving the situation are that the UAE has increased production and sends it though Fujairah that is separate from Hormuz after it left the OPEC oil organization (which sets production quotas for members to control prices). Kuwait is doing the same. Saudis have also increased production routing it away from Hormuz. The advanced countries have learned from the Hormuz crisis. China has changed its oil consumption policy to use it more efficiently one of the big changes from the Hormuz crisis. Instead of importing 10 million barrels a day oil China now imports 6 million barrels a day. China was always a prolific user of oil and as long as oil was plentiful China did not pay enough attention on how to use oil as efficiently as some European nations and Japan are doing. During the crisis the rest of the world including India had time to figure out ways of running their economies using less oil and will continue to do so knowing that Hormuz had allowed one country (Iran) to put the whole family of developing nations in Africa and Asia, Latin America at risk. Hormuz channel itself has opened and about 40-60 ships are making their way through each day. There are risks that Iran will try to close Hormuz again or that the war will restart and this means all nations advanced and developing nations are finding and securing alternative oil supplies. US is also increasing production through its oil base and oil base of its allies, and American plus European oil companies will act to increase supplies and new sources of oil to prevent the world being threatened again in the way it was at Hormuz in 2026. ...

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US naval base at Bahrain and the damage from missiles in the war  June 2026 as shown by the WSJ. Bahrain is located only 150 miles from the Iranian coastline and was targeted along with other sites including Kuwait and UAE. A new route along the Omani coastline protected by US naval power in the region that then goes along the UAE coastline is now the route opened up by the US for shipping oil through Hormuz. This route is key to reducing oil prices and the recent visit by Marco Rubio of the US to the Gulf Cooperation Council being held in Bahrain June 25,  and the meetings held there, affirmed the open navigation of the seas on international waterways as being under international law. This has led to the fall of oil prices to prewar levels of around $70 per barrel. The US will redo the naval forces and bases in the region with less in Saudi Arabia and Kuwait, smaller footprint in Bahrain, and move some naval forces to the west closer to or inside Israel. The administration has asked Congress for $40 billion for the naval and military effort to restore open navigation of the seas for the world's energy of which $5 billion will go to repair of damaged naval facilities. One of the effects of the war that is constructive is ther is now an awareness to manage oil consumption in India, China and Japan major users of oil coming through Hormuz. China has figured out ways to do without the 3 million barrels a day from Hormuz, India has setup alternative oil supplies from Venezuela, and Japan is both cutting oil use and looking at alternative sources. Oil companies are also working on alternative supplies in other regions of the world. Both China, India, and European Union are accelerating their renewable energy sources to meet energy requirements. This means after 2026 the world may not be dependent on Hormuz for energy supplies, Hormuz becoming one of multiple sources and alternative supplies than in the past. This will also keep oil prices in the $50-$70 range that is consistent with cost of living and economic growth. ...

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Iranian response to Memorandum of Understanding shows reality of 2 factions in Iran, the IRGC military faction, and the elected president Pezeshkian plus Turkey /Pakistan/Egypt and Qatar as the second faction. With IRGC military rejecting the Memorandum on opening Hormuz and discontinuing nuclear weapons programs. This was true at the time Vance conducted negotiations and the Memorandum appears to have been accepted by IRGC only under great pressure from Turkey, Pakistan, Egypt, and Qatar, and the faction under Iranian elected president Pezeshkian. Where IRGC thinking could have been to give  agreement to the Memorandum that they had no intention of keeping, as its policy on nuclear weapons remains unchanged, and its goal is to use Hormuz for leverage and extend its control of Hormuz channel. The cost of sanctions and not being able to export oil, the effect on its economy, on cost of living with rampant inflation, may be of little concern to the people who run the IRGC military who suppressed all dissent and protests in 2026. Protests across different parts of society to the deteriorating economy. How could the US respond? The US used the time of the ceasefire to create a new status quo by using open navigation of the seas as the principle behind opening and protecting the Omani side of the Hormuz for oil shipment. This is a principle accepted by all countries. There is a backup plan of the US, China, India, Japan and other countries and this is to prepare rapidly to do without Hormuz so that the economies of these nations are not affected. The US also supported efforts by Saudis and Kuwait, UAE, to increase oil exports through channels outside of Hormuz, UAE's decision to increase oil supplies and lower prices by leaving OPEC, and US creating alternative supplies for India through Venezuela. Most important is China's decision that it no longer needs the 5 million barrels of oil from Hormuz for its economy to operate using alternative supplies and increasing efficient use of its oil resources. The world is also building up oil supplies and inventories so that Iran cannot threaten a cutoff from Hormuz because all nations have made other arrangements. Attacks by Iran on oil shipping on the Omani side protected by the US breaking the principle of open navigation of the seas, can then be considered Iran disrupting an open seas navigation route which it no longer is allowed to do under international law. This is something the world public opinion would support. The NYT has been critical of the DJT action in Iran, the WSJ and other media had joined in criticism. The situation in July 2026 is that the criticism of the US by NYT and other media, and from Europe and other countries in Asia will now be muted, because the US has tried all the options and is now finding ways to be able to bypass Hormuz altogether, and a backup plan or strategy to minimize the impact on oil prices. So that oil price of $70 may be kept at level around 10-20% higher not much more as Iran's military IRGC continues to disrupt the Hormuz supplies.  ...

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The story of Al Thani Emir of Qatar and Qatar's impact on the Middle East using its LNG resources. He led the country from 1995 to 2013  when Qatar set up the state airline, a television network Al-Jazeera, and the US base Al-Udeid, gaining a presence in the Middle East through its LNG supplies.  North Dome is the huge gas field in Qatar. In contrast to Saudi policy and UAE policy Qatar supported the Muslim Brotherhood and the Arab Spring movements. When these movements lost momentum Qatar continued its own foreign policy in competition with the Saudis and UAE.  Native Arab Qataris are only 330,000 out of a population of 3.1 million in Qatar, the rest mostly South Asians. There are 25,000 Britishers in Qatar. The South Asians are underpaid workers from India, Pakistan, Bangladesh and Sri Lanka who built the soccer stadiums during the World Cup 2022. The discovery of oil and gas has changed the region and created a region with this kind of population mix with wide disparities in income and wealth. As late as 1998 the GDP was only $10 billion growing to $115 billion by 2008 and $208 billion in 2025. ...

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Hormuz channel on July 13, 2026 -Iran Memorandum with US is meaningless as IRGC military in Iran and elected Iran government are in a power struggle. Every time the elected president confirms a ceasefire and opening of Hormuz by Iran to all shipping without tolls, the IRGC makes a show of agreeing under pressure from Pakistan, Turkey, Qatar and Egypt, then next day IRGC asserts that Hormuz is closed and all shipping take place on the Iranian side only with tolls. This means Iran is shutting down the Omani side of Hormuz channel which was opened by the US. This is against international law and open navigation of the seas for shipping. The result is that the US government and DJT have lost any confidence in negotiating with the IRGC who make the decisions. The US response is to restart the naval blockade, to be paid for by tolls at 20% to pay all costs of US to ensure safety of oil tankers. The news media is taking the Iranian side which is against the poor countries freely accessing energy and oil supplies at reasonable prices (Egypt, Indonesia, Philippines, Bangladesh, Pakistan, Sri Lanka, India and China a population of close to 4 billion people). Media does this by putting titles like "Iran is playing the long game," because of the opposition to the DJT administration by Democrats. The opposition Democrats fail to address the question about Iran having a nuclear weapon and the resulting danger to the region. DJT administration response is also to find alternative supplies to Hormuz so that India, China and other countries can meet their oil needs outside of Hormuz. As shown in Lyrarc this has already take place and China, India, Japan, cutting back its fuel use after prolific use of oil, and replacing it with renewable energy, more efficient use of energy. ...

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Vice President Vance's attempted thaw in relations with Iran (the Memorandum) and the Iranian response in missile strikes to interrupt open navigation in Hormuz on Omani side route breaking ceasefire happens on July 8, 2026. Early on in the US strikes the focus was on Iranian underground nuclear sites with preparations for nuclear weapons. When Iran shut down the Hormuz channel to navigation the US extended this to a naval blockade. As the US bombing of military targets in Iran continued in May and June the WSJ and other media were critical of the US. DJT turned to JD Vance to get the Iranians to negotiate a ceasfire with a Memorandum of points they agreed to included a plan to have talks on nuclear issue, open up the Hormuz channel, lift American naval blockade and American sanctions to Iranian oil exports. This WSJ Editorial Board commentary says Iran has not acted on as it said it would - no talks on nuclear issue are started, and Iran launched missiles against shipping in Hormuz.  This WSJ editorial says Iran does not intend to open Hormuz or discontinue its nuclear weapons efforts. In this situation the only options for the US are to find alternative sources for oil for India and Japan, and China in tacit cooperation with the US to find alternative sources as well as make more efficient use of oil. China is now doing without the 4 million barrels it was getting from Hormuz and has decided to do without these supplies altogether. For the UAE and Saudis to find alternative routes to get most of the oil out, UAE to increase output outside of OPEC to reduce prices. All of these actions are taking place and the ceasefire offered a breather for that to get established creating a new situation where if Hormuz remains unopened the rest of the world will be able to go on as before without being seriously affected. Better management of overall oil supplies is already taking place, inventories are building up, so that at some point Hormuz does not affect oil prices significantly. This is the best and most realistic option and the US, China, India, Japan, the EU, are going ahead with it. ...

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Iran's Assembly of Experts (clerics) acting as an arbiter as a power struggle takes place between elected president Pezeshkian and the Revolutionary Guard Corps (IRGC). The Assembly of Experts made up of clerics and the Ayatollah as its head shift support to one faction then to the other. This is who US is talking to and negotiating with. To negotiate with Pezeshkian even when agreement is reached the next day IRGC can come out and take action to control Hormuz by knocking out ships. A Qatari ship carrying 2 million barrrels in Hormuz was hit by IRGC when Pezeshkian signaled he had reached an agreement with the US that would release $6 of $12 billion in Iranian funds in Qatar. IRGC plan is to control Hormuz, charge tolls, and raise $40 billion a year through tolls. IRGC believes it can disrupt the narrow 15 mile channel on the Omani side in violation of international law of navigation that the US wants to keep open. For the US the question is - Can you even negotiate with the entity that is Pezeshkian and the elected government when it is in a power struggle with IRGC? Can you negotiate in the context of the burial as martyr of Iran's current religious leader Ali Khamenei? And even if you negotiate, IRGC responds to close Hormuz, US restarts bombing, where does this get the US when Hormuz remains closed. The US has we show here has only one option not stated in the Media. That is to bypass and ignore Hormuz and get alternative supplies of oil and keep naval blockade at low cost. For the US and the world to generate alternative supplies to Hormuz the US works with China, India, Japan, Indonesia and European Union, Arab states, to take the following action. Get 5-6 million of the 20 billion of Hormuz barrels as day using existing and new Saudi and UAE pipelines outside of Hormuz channel, accelerating renewable energy and EV's hybrids, China doing without the 4 million barrels a day from Hormuz by cutting its oil use through energy efficiency, alternative sources of oil from Venezuela ramp up and new oil production in the US and other places in the world, using reserves and rebuilding reserve supplies, better management of the 80-90 million barrels a day of the 108 million barrels a day the world used in 2025. All of these action are taking place in the transition to a world without Hormuz for the last 60 days. ...

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China's export dependent economy with 4% decline in fixed investment Jan-May 2026 and 27% jump in exports.1 million car exports per month in June. Exports make up 20% of China's GDP. China is challenging German companies in their home markets in Europe. Domestic sales of cars are down 16% in June. What this means is that China's growth now depends on exports alone, with construction slowdown, and weak consumer spending. How does this tie into China's posture in trade with the US? It negotiated from a position of strength on rare earths not to give in to DJT tariffs yet knows the importance of trade for the Chinese economic model, importance of US and EU markets, markets worldwide. China's strategy is to shift some of the lost US sales due to tariffs to other countries in Latin America and Asia. A top priority is to keep trade with the US and European Union on a good footing, so that its exports can be absorbed. How does it affect Hormuz? For China Hormuz as an oil source is much lower in importance and China can do without Iran, it absolutely cannot do without the US and European Union to take a big part of its exports. It also does not openly say this but it also shares concerns similar to the US, on nuclear weapons in Iran. India, Japan and the EU have similar concerns. As shown in the articles on this page China has large unused oil in reserves and coal supplies, has lower oil demand at 4% growth, and is accelerating renewable energy, so that it is now importing 8.5 million barrels a day down from 12.5 million barrels a day. By doing this China puts this oil back into the world supply leading to lower oil prices. This means the world can do without the supplies from Hormuz, keep lower oil prices, and go on as before if Hormuz remains closed. The US can focus on domestic issues and its involvement in the Middle East can be limited to naval blockade which the US Navy is capable of doing. This is good for China, good for the US, and good for the World. Local governments in China, provincial authorites, pushed growth in building road, bridges, factories during the 30 year growth phase 1990-2020. In 2026 local governments with debt loads and lack of good projects for investment are a bottleneck to growth. This is the first time fixed investment is in decline, except for the years in 1961 and in 1967. The year 1961 is a result of many mistakes made by chairman of CCP, Mao, by shifting 2 million in farm labour to work in iron foundries, and the shift from private farm plots to soviet style commune farms, coupled with floods leading to 43-46 million famine deaths (1994, Chen Yizi, top advisor to CCP General Secretary Zhao Zhiyang). 1967 is the chaotic situation of the Great Proletarian Cultural Revolution launched by Mao. What it shows is that the China Miracle like the Japan Miracle and the German Miracle of recovery after World War II, is based on certain conditions and will enter a phase of lower growth closer to 3% like other industrialized nations over time. India and Indonesia are larger than China and will be the next growth story, which is also shown on these pages this week, with the address to the Indonesian parliament by Modi, and Indonesian president Prabovo's saying that he has studied Modi's economic changes and is copying them as there is no copyright. ...

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US can working with all countries find replacement for Hormuz supplies. The meetings with Iraqi prime minister Zaidi at the White House are one part of an extended effort that includes China, India, UAE, EU, Venezuela, other oil producers and oil consuming countries and regions with expanding shift to renewable energy (India, China, EU). Chevron and other companies plan to invest $60 billion in oil projects in Iraq including Kirkuk to Baniyas pipeline. The plan is to ramp up Iraqi oil production to the 4.5 million barrels a day Iraqi production by rebuilding or putting  new pipeline from Iraq to the Syrian coast on the Mediterranean. This is activity from the White House to replace Hormuz as this will keep the US out of a prolonged conflict. The media has not covered the replacement of Hormuz as a viable option to bypass the conflict, leaving a naval blockade in place, and continuing focus on domestic priorities with China, India, EU and other major nations all working together in this direction. China's economy is weak, India's needs trade and technology infusion, EU needs US cooperation and trade, all 3 powers keenly interested in a different path than one put forward by Iran of prolonged and unneeded conflicts for 4 billion people in these largest economies and the 4 billion people in Africa other Asia, and Latin America. That is 8 billion people's interests vs 45 million in Iran (if IRGC has only half the population's support in rural Iran, small towns). Can 5% of the world's population determine the direction of the 95%? Can culture wars in the US which heavily determine the distortions appearing in the NYT,  and the ideological wars on capitalism vs socialism in the WSJ, Republican vs Democrats midterms and other election politics distorted presentation, be allowed to obscure this fact that 95% of the world's people including Americans are interested in fixing drug cartels and fentanyl, fixing dilapidated infrastructure, in building new housing, in tackling oil prices, not the bombing of targets in the Middle East (limiting such action to nuclear weapons facilities not using force in Hormuz). China adds 4 million barrels a day by finding alternatives sources. UAE and Saudis are increasing production outside Hormuz, UAE outside of OPEC. Iraq can add 3 million barrels a day from 1.5 million barrels a day in June 2026 to 4.5 million barrels a day. Because Venezuela's current production is about 1 million barrels a day it can ramp this up to 3.5 adding 2.5 million barrels a day. The chart below shows how Hormuz can be replaced and the task ahead for nations and regions representing 8 billion people in the world. UAE 2 million barrels a day via pipelines, Saudi add 2 million barrels a day via pipelines, Iraq 3 million barrels a day via pipelines, China 4 million barrels a day by alternative sources, India 2 million barrels a day from alternative sources and renewable energy target upgrade, Venezuela 2.5 million barrels a day,  US  1 million barrels a day, Other - Guyana, Canada, Brazil. Shown alongside is a report from Goldman Sachs analysis which come to a similar conclusion and with facts on each specific region's ramp up of oil supplies to replace Hormuz in a race against time.So that Hormuz will be left behind, so that the world and the US of 8 billion people can pursue other priorities of peaceful cooperation, to achieve "life, liberty and the pursuit of happiness" as the Founders aspirations and the world's aspirations.     ...

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How the grandiose visions of Saudi new cities in the desert are being reset after the war, and the people in the poorest countries are being faced with higher prices for food, fuel and fertilizer when they can least afford it in 2026. The media focus has been on the Hormuz without saying, A. -that now with the Omani route added to the Iranian route in Hormuz a new defacto 2 route Hormuz is setup by the US Iran agreement. B.- that China has already reset its energy policy to do without the 3 million barrels a day it got through Hormuz, India has already setup new oil supplies from Venezuela, Japan is working out new arrangements, US is creating incentives for oil companies to produce in other regions of the world. And C.- the renewable energy policies, how much energy to use per unit of GDP under effcient use, is being accelerated in EU, India, China and Japan, and indirectly also in the US as cost of renewables comes down compared to fossil fuels. These will be constructive aspects of the situation. The world also shifts away from the Middle East a source of decades of wars that brought down the Soviet Union, destroyed some economies in South Asia (Afghanistan, Pakistan), created the distraction for the US that led to letting its infrastructure and economy to weaken, and destroyed the economic and social fabric in many parts of the Arab world and North Africa (Libya, Iran, Iraq, Syria). It closes a chapter of the Middle East from which lessons can be drawn for a focus on economic development and using science and technology to improve living standards of the people of the world, to tackle climate change, and for peaceful cooperation of major nations. ...

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Greg Ip says what a difference US policy under DJT has made for energy independence and for exports. US economic growth is affected only slightly as it exports oil and LNG. Forecasts by Citi revised for the US for economic growth by only 0.1% downward for the Iran War, for the European Union by 0.4%. EU spends 1-2% of GDP to get imports of LNG and oil. US gets 0.2% of GDP for the oil and LNGit exports.  The US is in a strong position with oil policies to increase production and there is also additional supplies from Venezuela that can be added to replace Persian Gulf supplies. Which is why DJT can tell the world and the Europeans, Japan and China to get their own oil and do the job of opening Hormuz because US does not get any of its oil and LNG from Hormuz straits. In 2025 EU gets LNG from Norway 89, US 81, and Russia 37 in billions of cubic meters of imports for total in 2025 of 207 down from 257 total in 2021 because of conservation. US LNG will increase as US sells more LNG to Europe in 2026 and 2027 and reduces the little it imports from Russia. EU is doing a good job of conservation that the US can adopt to export even more to India and Japan replacing some of the supplies from the Persian Gulf nations. ...

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Israeli attack on South Pars Field and Iranian response with attack on Qatar North Field- this happens on March 18, 2026. About 10% of total global oil supplies are affected about 7 million barrels a day. Attacks on oil facilities and fields are a different order of magnitude compared to closure of Straits of Hormuz, as oil tankers can still deliver the oil when it is safe to cross the sea passage. Attacks on oil fields and facilities will take a long time to repair. The US president calls on Israel to stop such attacks. The Pars gas field supplies homes in Iran and is used for fertilizer production in Iran. It also supplies Turkey which would have to get alternative supplies from Russia or on the world market.Oil briefly hits $116 a barrel before settling at $96. The situation resembles the one in Ukraine when Ukraine grain production could not be sent from the Black Sea ports to Europe and Middle Eastern countries like Turkey, Egypt and Morocco, and fertilizer exports could not be sent to Asia. The Russian attacks on Ukraine ports led to global shortages of fertilizer and grain. ...

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Kuwait oil production cut as storage fills up March 2026. Fewer tankers are making it through the Straits of Hormuz. Huge inventory on tankers in ocean waters and the added supplies from Venezuela help relieve the pressure on oil supplies as Iranian oil production stops. The US allows India to get Russian oil for 100 days in this special situation of war in the Middle East region. 

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Prices of gasoline expected to peak at about $4.31 a gallon, while its much higher for diesel that powers trucks on the road at $5.80 in April 2026, according to Energy Information Administration. Diesel is produced mostly in Persian Gulf as the oil in the US is mostly suited for making gasoline and Gulf oil better suited for making diesel. Supplies were tight before Iran War already, while gasoline supplies are not tight. This is why diesel (and jet fuel) costs a lot more than gasoline in 2026.

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WSJ Editorial Board on Iran strategy to have low level skirmishes and missile attacks for the rest of 2026 and keep Hormuz on ship by ship basis essentially blocked. Most of the oil through Hormuz going to teapot refineries in China, some to Japan and India. Alternative US supplies have to be arranged for India and Japan, nuclear, renewables have to be accelerated immediately as this is the likely scenario. China would have to look for alternate supplies. It is not just the US response, how will China, India and Japan respond to get alternate supplies, how are their governments preparing for this scenario? France announced it is going to go all out on electric cars to cut use of oil.

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India received $135 billion in remittances in 2024-25 from the 18.5 million Indian diaspora, of which 10 million live in the Middle East region sending $51 billion a year. This finances the merchandise trade deficit.  In UAE alone there are 247,000 Indian students and immigrant labor is the main labor supply in the Gulf kingdoms.  Crude oil of 25-30 million barrels is on the seas as inventory to which India has access making crude oil supplies not an issue for the short term. Indian refinery production for export can also be adjusted if needed. India has received a 100 day exemption to import Russian oil from the US since the Gulf war began easing concerns for crude oil supplies. Situation for LPG is more complicated. India has used the Chabahar port to ship supplies of aid to Afghanistan on an overland route which will not operate till the tensions ease. 

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Sanae Takaichi press conference with DJT at White House March 19 2026- there is no mention of Japanese help with clearing Straits of Hormuz. US Japan relations after the meeting of Takaichi and DJT at the White House appear to be in good shape. Japan will invest $73 billion in US investment projects in 2026 as part of the $550 billion commitment made at the time of the US Japan trade deal in 2025 under the previous LDP prime minister. Takaichi is coming with strong support in Japan after winning a landslide victory in the general election. Japan's main concern is the belligerent North Korea and China's posture in Asia as it relates to Taiwan. Agreements were reached on critical issues- to develop alternative supplies of critical minerals, to rebuild the shipbuilding industry which US and Japan had given up after dominating it for most of the 20th century. This is critical to ensure open navigation on the oceans of the world. Agreements on high tech and AI, and agreement to purchase Alaskan oil to cut Japan's 90% dependence on volatile Middle East supplies. Japan has managed Middle East supply by keeping over 254 days of inventory but this looks to be very risky as Germany learned from its dependence on Russian oil which went in the wrong direction under Merkel. Japan has released about 18% of its total reserve amount of the 254 days inventory (146 days in national reserves and 101 days in private mandated reserves). It uses 3.14 million barrels a day in 2026 down from 5.8 million barrels a day in 1996, using about half today through conservation and using renewable energy showing the potential for the US and Europe. Germany has cut oil consumption by a third in comparison from 2.9 mbd in 1996 to 2.0 in 2026. And the US remains stagnant with oil demand highest in 2005 at 20.5 mbd and 20 years later at 20.5 mbd mainly because 14mbd or 70% goes to cars and trucks on the road for 347 million people over continental spaces (compared to 297 million in 2005) for a reduction of oil use of 15%. ...

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It might not all make sense that the Pakistan/China mediated ceasefire conditions (including US and Israeli condition of no nuclear weapons development and ballistic missile development) are really not known even in the media today, only known to the Iranian government and the US government. In these conditions Iran's government gets to show that it had achieved its goals, even with enormous reconstruction costs of the damage done during the war. DJT had pointed to a sort of regime change in Iran after most of the earlier leadership has been removed, and new leaders in place who are keen on setting up conditions for their own administration replacing the old one.  Over the period 2027-2030 the prospect is real that China, India and Japan may shift their oil supplies sources to other regions, increase conservation per unit of GDP, and increase supplies of renewable energy, steps already taken by Germany over the last decade. Most media looks only what happens today and in 2026. This may be the last of the Middle East Wars before Europe and the US, and India, China, Japan shift away from the Middle East to get supplies of fossil fuels, and it may bring new renewables technologies that reduce the dependence on fossil fuels to the point of making a true transition to renewable energy. It may also be the last of the Middle East Wars in the sense that people of European nations and the US insist on no involvement in MIddle East as a sort of quagmire for squandering American, European and Asian vital resources of people and capital, ample example being given over the last 40 years. Considering the costs of the war and the moral cost of destroying infrastructure such as power plants that hurt the local population more than the regime in power, China, Japan, the US, and EU, India may find it is easier to race each other in coming up with alternative supplies and shifting to renewable energy faster than planned, making Middle Eastern oil supplies  and volatility in prices redundant, which would be a good thing after the hugely negative and costly experience of the last 50 years of dependence.     ...

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Putin visit to Beijing. Xi- Putin meeting in Beijing, May 20 2026 follows DJT visit by 2 weeks. China- Russia economic relations oil cover new oil and gas pipelines that reduce dependence for oil on the Persian Gulf region after Hormuz  Straits is blocked, and defense supplies for Russia in its war with Ukraine.

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Putin visit to Beijing follows DJT visit by 2 weeks May 2026. China must carefully assess its interests in a trade relationship with the US and the EU, vs good relations with Russia and access to oil and gas supplies.

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Saudi East West 750 mile Pipeline from east coast fields to west coast at Yanbu port- capacity 7 million barrels a day with average 4-5 million loading each day in April 2026. About half of this goes to India and China. It is critical supply point for the Saudis now that Straits Hormuz is restricted. The UAE has pipeline to Fujairah which it seeks to double capacity by 2027 from 1.8 million barrels a day to 3.6 million barrels a day. UAE has left the OPEC cartel that limits supplies and sets prices, which makes this critical for the US to ensure oil prices remain at levels that are moderate. UAE now favors lower oil prices while the Saudis objective is to keep prices high.

LyrArc Article Gist
By taking action in Venezuela in a way that benefits the Venezuelan people (and similar action in the long run interests of the Iranian people to dedicate most of the resources for development and increase share of oil revenues without discounting and removing sanctions ill effects on economy and quality of life) major new changes can improve quality of life in the world.  Venezuelan production which was 3 million barrels a day has declined to 900,000 without US investment and technological upgrades. With US investment this can be increased to put additional oil supplies on the market lost in the war with Iran and smaller traffic through the Straits of Hormuz. Venezuelan crude is best suited to US refineries which frees up shale oil for export to meet needs of India and Europe. China which had hyper growth through massive oil consumption would reduce its growth rate and its impact on climate change as it adjusts to the loss of 3 million barrels a day it no longer gets from Iran. Slower growth rate in China is good for the climate as it is the hyper growth of China that put the most pressure on climate even as Europe and the US had cut  fossil fuels consumption over the last decade. China made 2 coal plants a week and 95% of all new global coal construction in 2023. India needs additional oil supplies as it increases its growth rate from a much lower point of development (and electricity poverty) than China. By simply settling for normal development compared to hyper development targets( China has reached a point of Oil Fairness Percentage where each country gets to use the same percentage of oil as its population is as a percentage of world population- the number being about 17% for China for both, with the number being 18% for India and it having a shortfall of 12% based on its oil consumption being only 6% of the world total). China can reduce oil and coal consumption reducing pressure on oil prices and absorbing most of the impact from the loss of Iranian oil. China and Russia + (old Soviet territory) Canada, Australia, Brazil, Argentina, make up about 40% of the world's territorial landmass, would be large beneficiaries with improved climatic conditions from burning less coal. They are now highly developed countries and do not need hyper growth which requires China to build 2 coal plants a week and consume excessive amounts of crude oil and coal based on artificially set targets that make no sense by destroying the climate when no child in China lacks electricity to read. Marathon Philipps Valero with over half a million barrels of refining capacity for heavy Venezuelan crude can now put this to use using the imports by US of lower priced (by $9 to Brent crude) Venezuelan crude oil. In a few months of 2025 US has imported 280,000 barrels a day of Venezuelan crude in February 2026 alone some of it going to the large Valero refinery in Port Arthur, Texas. American oil refiners make larger margins using the Venezuelan crude than they make on light crude from shale oil producers in the US. What this does is to increase the supply of crude and refined oil products on the market as the light crude get shipped overseas to India and Europe- including countries like Spain which took in 100,000 barrels a day of shale crude from US in February 2026. ...

LyrArc Article Gist
More than a retreat it gives the US, EU, India, China and the nations in Asia and Africa, Latin America most affected by higher oil prices and lower economic growth a time to pause and rethink dependence on the Gulf region for oil supplies. It is not mentioned in the media yet there has to be a link between the US president's visit to Beijing and Beijing's support for a normalized US China relationship, and offering its support for a settlement. This gives EU, China, India, Japan, and poorer nations in Africa, Asia, such as Pakistan, Turkey, Indonesia and Brazil, some relief from reduced access to oil supplies. US is also planning a supply from Venezuela to India to take pressure off oil supplies in Asia by offering Venezuela as an alternative source. China is in many ways joining the US to bring about a denuclearized Middle East, doing it in a quieter way with Iranian public opinion making a shift to put its economic development ahead of missile development. As the two sides have different interpretations and it is still only a Memorandum of Understanding it is not a situation where the US is sending billions of dollars to support the military in Iran as Obama had done. Attention will shift to the Iranian economy over the next 12 months.  US conveys that it has nothing to gain from wrecking the Iranian economy or nation as the Iranian people if avote were held today would clearly choose putting the economy first by huge margins considering the widespread protests in Iran in 2025 that started this crisis. The US naval blockade was effective and is always an option, with US and partners having greater experience in the situation presented by the narrow straits in Hormuz. Arab partners also acted with restraint and is itself an opportunity for Iran to change direction. China's making cuts of 3 million barrels a day in oil supplies from Hormuz is itself along with acceleration of renewable energy in both China and India is one of the dividends of this crisi. Another is the gradual shift to alternative supplies from other regions of the world so that Hromuz region can no longer dictate oil prices in the world. Accelerating Venezuelan and UAE, US, other oil and gas  supply growth will also put increase supply and renewables reduce  demand growth as a result of the crisis to break the hold on oil prices of the oil cartels of Qatar, and Saudis. As a transition fuel oil can be be kept below $50 a barrel, not at prices at the whims of the princes in the Middle East at the expense of the people of the Arab world from Egypt the most populous and Tunisia, Morocco, to the Muslim nations such as Turkey and Pakistan,Iran itself which bore the brunt of this Hormuz crisis. The US has several priorities including in its relations with oil cartels dominated Mexico that  brings drugs and people across US borders, with other nations in EU and Asia that have benefitted through deindustrialization in the US leaving it poorer across a vast part of America. Advancing objectives in one area such as denuclearization does not mean not addressing priorities at home and in relations with other regions. China shares American interest in denuclearization of the Middle East this should now be put to the test. It is an entirely different situation in 2026 than what weak leaders from Bush to Obama allowed to happen by  wars in the Middle East - the US naval blockades of 2025/2026 are entirely different in cost in terms of men and dollar investment and used to convey America's determination not to waste vital resources of the Nation. The best policy is not to pursue policy for absolute wins but make intelligent choices and in some situations pause to reflect on the best course of action and other ways to reach goals. By getting China and the US as world powers for denuclearization even though this is not vocally said, both gain and both will come up with solutions. ...