For decades, the Islamic Republic told its people that China was the future. The IRGC built its entire economic survival strategy around Chinese money. In fact, 97% of Iranian oil was flowing to China before this war began. The shadow fleet, the ghost refineries, the crypto pipelines, the sanctioned banking networks, every workaround the regime constructed was built on the assumption that China would always be there.
But because of Iranian attacks in the straight of Hermoose, factories are now shutting down in China and protests are breaking out in the streets. Something that’s not a common occurrence at all. That’s why just recently, Chinese President Xi Jinping publicly called on China to open the straight of Hermoose. Iran’s plan is backfiring tremendously and IRGC is now begging for a deal.
They want the US blockade gone and they’re willing to offer anything in return. Just yesterday, the IRGC actually sent a secret peace deal to the United States that would open up the state of Hermuse in no time. But before we get to the peace deal, let’s take a look at what exactly is happening in China and why Xi Jinping is turning against Iran.
Four toy factories in Guanji shut down on the same day, leaving nearly 10,000 workers jobless overnight. The worst part is that these workers had not been paid their wages for months and now the factory is shut down. The closure came as the cost of plastic which is made from oil and natural gas surged after the traffic slowed down through the straight of her because of IRGC attacks on civilian ships.
Now Chinese toy industry was already under tremendous pressure from rising cost. But this war has pushed it over the edge and because workers had not received compensation for months maybe 2 3 months they are now in the streets protesting for back pay and future compensation. Now this is not an isolated incident.
We are seeing signs of cracks appearing all across the Chinese economy. First we have car sales which fell in March and have plunged further in April. Then we have restaurants and hotels that are seeing fewer customers as households turn cautious. Then we have factories. And I’m not just talking about toy factories.
Factories in general that are slowing down because of falling sales. The cars are not moving off of lots in dealerships. That means factories cannot produce that like they used to. And that means steel factories are slowing down. And that means any bunch of things that a car factory uses, all of them are slowing down.
And the reason I’m focusing so much on the car is because that’s the data that the Chinese government made public just recently. We don’t have other data to compare exactly what’s going on. Now, of course, I don’t want to make it sound like that China is the only country that’s suffering because of what’s happening in the Strait of Hermoose.
That’s clearly not true. But I want to highlight this new data that’s coming out of China because for weeks, people have been arguing that China is winning this war, a war that the United States started when in reality, that’s just not true. From the beginning, Chinese officials knew the situation they were in.
And that’s why they never flat out came out in support of Iran. They were always cautious and they always urged Iran to not carry out terrorist attacks against Gulf countries. This was of course a bit surprising for a lot of people who believed that Iran and China were like buddy buddy, you know, forever allies or something when in reality that’s not entirely true.
Of course, China buys a lot of Iranian oil. Around 11% of Chinese oil imports come from Iran. But on the other side, Iran is completely dependent on China. As I said at the beginning, 97% of Iranian oil exports go to China. But from Chinese point of view, they are way more dependent on other Gulf countries than they are on Iran.
You see, around 40% of Chinese oil comes from other Gulf countries like Saudi Arabia, Kuwait, Bahrain, Qatar. And that means they don’t want to piss off the Gulf allies just to show their support for Iran. And that’s why just recently, in fact, Xi Jinping openly called on Iran to open up the state of Hermoose. Take a look. Here’s the statement.
And this statement came out on the same day when the toy factory started closing down. Xi Jinping calls on Iran to open the state of Hermoose, saying it aligns with common interest of countries in the region and international community. This is yet another example of Iran being way more dependent on China than the other way around.
China is way more dependent on the straight of Hermoose specifically. They want every country to be able to use Straight of Hermoose. They don’t want Iran just running the straight like it’s their toll booth. Now, unfortunately for Iranian officials, this isn’t the only problem they have to deal with. They want to keep Chinese leadership happy, of course.
But right now, they are way more worried about something that’s happening right inside of Iran and something that’s happening at a very fast rate, and that’s the US blockade and Iranian oil tanks getting full. Now, yesterday we covered how the situation was getting so close to being desperate that Iranians were now pulling out these tankers that they had retired and they are now using them as like floating oil depots.
They’re putting oil in them and just letting these tankers float in the Persian Gulf as like temporary storage, I guess. I’m not sure what the right word would be, but even doing that, it’s not giving them a lot of breathing room. And because of that, they’re now going even more old school. And what I mean by that is they’re pulling out old oil tanks storage that’s basically not usable, but they’re using them just to prolong the survival of their oil fields.
As you guys probably already know, Iran does not want to shut down the oil fields. And that’s why they’re trying to find any way they can prolong that decision for as long as possible. Now, on top of this, there’s another report coming out of Iran which says that Iranians are now burning their oil supplies, basically their old products, to make sure they don’t have to shut down the production.
Oil flares burn intensely in Iran’s Kazakhstan on Sunday, sending heavy pollution into the sky. The footage comes amid a reported US naval blockade and speculation that full oil storage is driving increased flaring to manage output. Now, just to some context around this situation, oil refineries usually always burn some stuff.
Usually, it’s natural gas that comes out when you pump out oil and they just burn it high in the sky and just, you know, let it go into the sky. We see this all over Texas, especially here in Houston. But many people are now arguing that Iranian flaring has increased significantly since the US blockade has put in effect.
And the speculation is that Iranians are burning their refined products. Basically, they’re burning petroleum or something else to make room for all the oil that they’re pumping out so they can put them in storage where all that stuff that they are now burning used to be. Now, I’ll be honest. This is one of those reports that I’m a bit skeptical about because oil fields pump out a lot of oil.
Like, you can’t burn that much oil with just two whatever this is, chimneys. So, it’s unlikely that that’s what Iran is doing. Maybe it’s something else. Maybe something I don’t understand. So, for people who do know about the oil industry a lot more than me, they can comment down below. But this is where things do get a little bit more vague because all signs coming out of Iran are good signs for the United States.
It seems like that the Iran regime is getting close to a breaking point where they have to make a decision relating to their oil production and the oil fields. But no one exactly knows when Iranian stoages will get full and no one knows how they’re adapting and how those adaptations will impact the timeline as to when the storage will be full.
Estimus as to when all this will happen is all over the place. In fact, just yesterday, President Trump said:
“But what you’re referring to is that when when you have, you know, lines of vast amounts of oil pouring through your system, if for any reason that line is closed because you you can’t continue to put it into containers or ships, which has happened to them, they have no ships because of the blockade.
What happens is that line explodes from within both mechanically and in the earth. It something happens where it just explodes. And they say they only have about 3 days left before that happens. And when it explodes, you can never regardless you can never rebuild it the way it was. In other words, it will always be if you rebuild it, it’s hard to rebuild it all, but it would only be about 50% of what it is right now.
So it’s a very powerful thing that takes place sort of having to do with nature. But when when that gets clogged at the end, in other words, when you have to turn it off because you have no place to store this oil, either put it on ships or storage tanks, which they are just about finished with, uh, a very bad thing is going to happen. So I think they’re under pressure.”
But now other experts are saying it could be two weeks, maybe even 3 weeks. But this is not taking into account all the stuff Iran is doing like pulling out old tankers and pulling out oil tanks. So that should give Iran a little bit more breathing room, but it’s not that much. So it’s possible Iran could be getting to the breaking point soon, maybe in a week or two.
Now another sign we have that Iran is getting close to that point is that Iran actually offered a deal to the United States to reopen the straight of Hermoose just yesterday. This is the new proposal. Take a look. Iran gave the US a new proposal to reopen the state of Hermoose and end the war, but it wants to postpone nuclear negotiations for a later stage.
The reason for this is that the Iranian leadership is still divided about what nuclear concessions Iran is willing to offer. So, this proposal would bypass that issue and get to a deal faster. Now, here’s the problem from the US point of view. If the US lifts the blockade and ends the war, what leverage does the US get Iran to give up its enriched uranium and also suspend enrichment altogether? Those are the two main goals of the war.
So if Iran is not willing to give that now, I doubt the United States is going to stop the war, end the war or even give up on the blockade. Now, according to the report, there is going to be a big meeting, a situation room meeting today in the White House, and the administration will gather all the cabinet members to discuss how seriously to take this offer and how to respond from it.
If you guys remember, Iran clearly is desperate for a deal. They went to Pakistan, the foreign minister, and he said:
“Hey, we don’t want to meet with the United States, but we’ll meet with them later.”
Then he went to Oman and in the meantime, President Trump cancelled the trip that Steve Witkov and Jared Kushner were about to take to go to Islamabad to meet with Iranians. And because of this, the foreign minister went back to Pakistan because he wanted the trip to happen. He wanted some kind of meeting with the United States. And it seems at this trip or at this second meeting with Pakistan, Iran offered a new deal to the United States, the deal that we just talked about.
So Iran clearly wants a deal. And now the question is what are they willing to offer to get some kind of long-term deal. Another thing that will be discussed in the situation room meeting is the ceasefire. If you guys remember roughly 5 days ago, President Trump extended the ceasefire and said that he will extend it for only 3 to 5 days.
Today is that fifth day. So US has to make a decision. Do they want to extend it again or do they want to resume the bombing campaign over Iran? Now, luckily for us, we have some statements from Iranian officials who are sharing what they think will happen. According to Muhammad Larzani, he’s the brother of Larzani who recently passed away.
The chances of war restarting are below 60%. Which is a very unique way of saying that it’s more likely than not that the war restarts because even if the chances of war restarting are 59%. That’s still more than 50%. So, it’s more likely than not that the Iranians believe that the war is restarting very soon.
Only time will tell what happens. As soon as we have more information about what happens in that situation room meeting, we’ll be sure to update you guys with a future video. So, catch you guys then. Now, to understand why Iran is behaving the way it’s behaving right now, we have to go back and look at how Iran got to where it is today.
That doesn’t just mean going back to 1979 when the Islamic Revolution took place. In fact, we have to go further back to when the Kger dynasty was ruling Iran in the 19th century and look at how the decisions the ruling class made back then still affects Iran to this very day. Well, guess what? That’s exactly what we’re doing in our multi-part podcast that just came out today.
So, if you’re someone who’s interested in the history of Iran and how we got to where we are today, definitely go check it out. You can watch it by clicking the links in the description or you can just watch it by clicking the end screen on your screen. Basically clicking the video that’s on your screen.
