The Third Persian Gulf War shattered trust in America and, without firing a single shot, elevated Beijing's standing to a level Xi Jinping could hardly have dreamed of.
On February 28, 2026, the United States and Israel launched a military operation against Iran, declaring their objectives to be the destruction of Iran's nuclear program and the elimination of the missile threat to Tel Aviv. Six months later, Washington and London are calling the principal winner of this war a country that did not launch a single missile or lose a single soldier: communist China. The paradox of the Third Gulf War is simple: the more insistently the American president demonstrates strength, the faster the reputation on which that strength rested for seven decades is collapsing.
The Shadow of the Two Previous Wars
The comparison is unavoidable. Operation Desert Storm in 1991 relied on a coalition of thirty-five countries and a UN Security Council resolution, while Saudi Arabia and other Gulf monarchies readily made their territory available to American forces. The 2003 invasion of Iraq proceeded without the same degree of unanimity, but Washington was still acting as the acknowledged hegemon, whose military presence in the region its allies regarded as a given rather than a matter for negotiation. The current war became the third in this sequence, and the first in which the United States could count on neither a broad coalition nor the unconditional trust of its partners. This time, the Gulf monarchies maintained conspicuous caution, avoiding involvement beyond the bare minimum, while allies in East Asia watched events unfold with growing anxiety about their own fate in the event of a similar crisis over Taiwan.
One Hundred Days Without Victory
The campaign against Tehran was conceived as swift and surgical. It turned out otherwise. By March 3, according to Al Arabiya, Iran had launched more than 450 ballistic missiles and 1,140 drones at Arab countries in the region, striking not only U.S. military infrastructure but also energy facilities and residential areas in countries allied with Washington. In response, the Islamic Revolutionary Guard Corps closed the Strait of Hormuz, the artery through which roughly one-fifth of the world's seaborne oil trade passes.
The military statistics from the first weeks of the war were ambiguous for both sides. The Qatari Air Force shot down two Iranian Su-24 fighter-bombers. An American submarine torpedoed the Iranian frigate Dena, leaving more than one hundred sailors dead or missing. On March 25, Israel announced that it had killed Alireza Tangsiri, commander of the IRGC Navy. According to Israeli Defense Minister Israel Katz, Tangsiri was the admiral responsible for the blockade of the strait. Iran's losses were severe but not crippling. Tehran retained the ability to manufacture inexpensive domestically produced missiles and continued striking Israel and the Gulf states even one hundred days after the conflict began.
It was precisely this lack of resolution, the absence of a swift and unmistakable military victory, that became the first and most important factor shifting the regional balance of power against Washington.
The reason is simple and uncomfortable for the Pentagon. For decades, Iran's missile industry was built specifically for a prolonged war of attrition, not for a decisive battle that could be won in a single campaign. Domestically produced missiles cost Tehran several times less than the missile defense systems its adversaries are forced to deploy against them. This asymmetry of costs prevented the United States from achieving a rapid and convincing victory despite its overwhelming superiority in the air and at sea.
The Strait of Hormuz Drama in Three Acts
The fate of the Strait of Hormuz in 2026 became a story in its own right, filled with contradictory statements and diplomatic maneuvering. On April 13, at Donald Trump's direction, U.S. Central Command began imposing its own blockade of the strait after nearly fifteen hours of negotiations between American and Iranian delegations in Islamabad ended in failure. Just four days later, on April 17, Iranian Foreign Minister Abbas Araghchi announced that the passage had been reopened to commercial shipping, demonstrating that actual control of the waterway remained a matter of dispute rather than an established fact.
In June, the two sides signed a memorandum of understanding that formally eased the blockade for two months and restored shipping. During this period, Trump continued making mutually contradictory statements, ranging from the imminent military defeat of Iran to claims that a peace agreement was virtually signed. By August, a retrospective analysis of the oil market showed that actual Iranian exports in March through May had remained at around 1.5 million barrels per day even without the memorandum, while official statements about the blockade and its removal bore little relation to actual commodity flows. On July 13, Trump announced that the Strait of Hormuz had come under U.S. control, calling Washington its "guardian," while clarifying that the restrictions applied exclusively to Iranian vessels and that the rest of the world was free to use the strait.
Three months of contradictory reports about the status of the same strait became the clearest illustration of how a war designed to demonstrate American power instead became a demonstration of its limits.
Behind Trump's forceful declarations that the strait had passed under American control lies a far less decisive reality. A physical blockade cannot be maintained indefinitely without risking the involvement of third countries whose tankers also transit the strait, while selective restrictions based on a vessel's nationality are extremely difficult to enforce in practice. The global tanker market has already perfected methods of circumventing sanctions through reflagging and intermediaries, most notably through the example of Russia's "shadow fleet" after 2022. That experience makes this kind of selective blockade more of a declaration than an effective instrument.
Beijing's Oil Magician
While Washington was fighting a war and struggling with its own messaging, China delivered the real stabilization of the oil market. According to SocGen analysts, Beijing reduced oil imports from 11.7 million barrels per day in February to less than 9 million by the end of May, a decline of nearly 3 million barrels. Chinese customs statistics paint an even more dramatic picture: 7.8 million barrels per day, the lowest level since October 2017, of which 6.6 million arrived by sea. From January through May, China imported a total of 218.363 million metric tons of oil, almost 5 percent less than during the same period a year earlier.
The effect proved decisive. Global oil supplies fell by 14 percent after hostilities began, yet predictions that prices would surge to $200 a barrel never materialized. Since late May, prices have not risen above the psychologically significant threshold of $100. One market analyst described China's reduction in imports as a measure comparable in effectiveness to OPEC+ quotas. Without it, global prices could have exceeded $150 a barrel with the Strait of Hormuz closed. By August, when the price finally climbed above $90, Beijing once again began curbing purchases and drawing down reserves. According to Kpler, China's commercial and strategic inventories fell nearly 8 percent from their May peak but still exceed 1.16 billion barrels, a cushion unmatched by any other country in the world.
Bloomberg's leading oil commentator Javier Blas describes what is happening as a change of era. In the past, during oil crises, the U.S. president would call Riyadh and ask it to increase production. Now the world increasingly looks to Beijing and asks it to reduce purchases. Beijing's motivation is pragmatic and has nothing to do with altruism. China's economy is export-oriented, and a global crisis would hit the purchasing power of China's own customers harder than anyone else.
The Secondary Beneficiaries: Moscow and the Gulf Monarchies
China is not the only country to have received unexpected dividends from the war. Russian Urals crude, budgeted for 2026 at $59 a barrel, rose to $77 in March and nearly $95 in April after the conflict began and the Strait of Hormuz was blockaded, despite sanctions pressure and the discount at which Moscow traditionally sells its crude.
The Arabian monarchies, while formally maintaining their distance from the conflict, received a similar windfall: prices above the levels needed to balance their budgets, without full-scale hostilities taking place on their territory. Alongside Iran and the United States itself, Europe emerged as one of the losers. Dependent on imported energy, Europe has been forced simultaneously to increase defense spending, pay more for fuel, and watch transatlantic trust among U.S. allies erode against the backdrop of Washington's blows to its own partners, from Taiwan to Seoul.
Taiwan Gift-Wrapped
Economic stabilization is not the only benefit Beijing has extracted from someone else's war. In mid-May, following Trump's state visit to China and his meeting with Xi Jinping, Washington announced the suspension of an arms package for Taiwan valued, according to various estimates, at between $12 billion and $14 billion. On May 22, Acting Secretary of the Navy Hung Cao confirmed during a hearing before the Senate Appropriations Committee that the deliveries had been paused because the weapons were needed for the United States' own military campaign against Iran.
The formal explanation was logistical priority. The political subtext tells a different story. Julian Gewirtz, who served as a China adviser on the National Security Council during the Biden administration and is now affiliated with Columbia University, notes that Chinese officials had spent years seeking precisely this outcome in bilateral contacts. The sudden suspension of arms deliveries amounted to a gift to Beijing that Chinese policy on Taiwan had been seeking for an entire decade. Taiwan ultimately found itself without the weapons it had been promised at precisely the moment when a demonstration of allied resolve would have carried the greatest symbolic weight.
The significance of this particular concession extends far beyond a single arms deal. Unlike military exercises with South Korea or diplomatic gestures toward third countries, Taiwan has remained the central nerve of the entire U.S.-China rivalry for three decades, an issue on which Washington traditionally had no room for compromise without losing face across the region. The pause in deliveries, justified by the logistics of the Iran war, sent Taipei its clearest signal in years: its own security can become a bargaining chip in Washington's much broader geopolitical game.
Kim Jong Un Gets a Break, Seoul Gets a Warning
Another U.S. ally in Asia, South Korea, paid a similar price. On August 16, the U.S. president announced a substantial reduction in the annual Ulchi Freedom Shield joint exercises with South Korea, citing his "very good relationship" with North Korean leader Kim Jong Un, the high cost of the drills, and the absence of any threat from Pyongyang during his presidency. The exercises, originally scheduled to continue through August 27, ended early on August 21, six days ahead of schedule.
Pyongyang's reaction was unexpectedly cool. Kim Jong Un's sister publicly stated that North Korea was simply not interested in the reduction of the exercises. The symbolic cost of the decision proved greater than its practical significance. Seoul received a signal that Washington's willingness to take the interests of allies along the deterrence chain into account depends directly on the current burden placed on the U.S. military in other parts of the world. For Beijing, the reduction of U.S. military activity near its own borders became yet another entry in the column of gains obtained without the slightest effort.
The long-term consequences matter more than the immediate savings on military exercises. For years, Pyongyang has justified the expansion of its nuclear arsenal by pointing to the threat posed by joint U.S.-South Korean drills. Weakening that justification will not, by itself, halt North Korea's nuclear program, but it deprives regional allies of a familiar argument for their own restraint. For Beijing, which has traditionally acted as an intermediary between Pyongyang and the rest of the world, any direct rapprochement between Washington and Kim Jong Un that bypasses Chinese involvement also carries a downside: the risk of losing its monopoly over that channel of influence. Beijing's gains from the Korean dimension are therefore less clear-cut than those it has secured from the Iranian conflict.
The World Voted. Not for America
The combined effect of the Iran campaign, tariff wars, and Washington's condescending treatment of its allies was captured in a July report by the Pew Research Center. The survey covered 42,151 people in 36 countries, with interviews conducted from February 8 through May 13, a period that almost completely overlapped with the most intensive phase of strikes against Iran. The result was unprecedented in nearly twenty years of Pew polling: in 27 of the 36 countries surveyed, respondents viewed China more favorably than the United States. America retained an advantage in only six countries: India, Japan, the Philippines, South Korea, Israel, and Poland.
In some cases, the gap looks almost humiliating for Washington. In Pakistan, 90 percent of respondents expressed a favorable view of China, compared with just 15 percent for the United States, a difference of 75 percentage points. Across seventeen middle-income countries surveyed, a median of 75 percent said the United States interferes in the internal affairs of other countries, while only 45 percent said the same about China. Even within the United States itself, according to a March Pew survey, the share of Americans with a favorable view of China rose to 27 percent, six points higher than a year earlier and nearly double the 2023 figure.
Council on Foreign Relations expert Yanzhong Huang cautions against rushing to triumphalist conclusions. What is happening, he argues, is less a genuine increase in affection for Beijing than a decline in America's appeal. China has won the comparison, but it has not won hearts. The distinction is fundamental and, in the view of many analysts, reversible.
Nobel Prize-winning economist Paul Krugman, who has become one of the most frequently cited critics of Trump's foreign policy, follows a similar line of reasoning. In his assessment, the current administration's reforms and personnel decisions are simultaneously undermining U.S. scientific and technological leadership, military superiority, the financial power of the dollar as the world's reserve currency, and the alliance system that sustained America's status as the world's leading power for decades.
Julian Gewirtz takes the argument further. Beijing barely needs to do anything to prevail in this competition because Washington itself is cutting funding for leading universities, creating conditions that make working in the United States less attractive to foreign scientists, and simultaneously dismantling its own instruments of global influence, from USAID to government-funded international broadcasting.
Philosopher and political scientist Francis Fukuyama offers an even harsher diagnosis: America's friends and rivals are increasingly converging on the view that the country is becoming a source of danger to global stability rather than its guarantor. Fukuyama also argues that Trump's May visit to Beijing exposed the asymmetry in the personal relationship between the two leaders. The American president publicly described Xi Jinping as a "great leader" and a "true friend," while the Chinese side confined itself to the restrained formulation of partnership without rivalry.
Beijing’s Diplomatic Capital
The symbolic dimension of this shift is also underscored by this year’s diplomatic calendar. China will host the APEC summit in November, and according to Western media reports, preparations are underway for a possible meeting between Donald Trump and Kim Jong Un on the sidelines of the gathering, an encounter that would depend organizationally on Beijing’s goodwill as host. For a country that only a decade ago was still viewed primarily as the factory of the world, becoming the principal venue for meetings among global leaders marks a qualitatively different status, and the Gulf war has only accelerated that transition.
The information dimension of the confrontation deserves separate attention. While Washington cuts funding for Voice of America and other instruments of public diplomacy, Chinese state media continue expanding their presence in Latin America, Africa, and Southeast Asia, the regions that, according to Pew data, have shown the largest shift in public sentiment toward Beijing. The military campaign has given China not only an economic advantage but also a powerful narrative opportunity: the story of a restrained, stabilizing China contrasted with an unpredictable America at war virtually writes itself.
Beijing’s Cautious Optimism
It would be a mistake to assume that China’s expert community is gripped by euphoria. Wang Jin, a professor at Northwest University in Xi’an and one of China’s leading Middle East specialists, warned in an article for the regional publication The Diplomat against reducing the situation to the simplistic formula “America lost, China won.” The Arabian monarchies remain dependent on American military technology, and after the Iranian missile and drone attacks that dependence has only deepened. Neither the United Arab Emirates nor Bahrain, in Wang Jin’s assessment, is physically capable of replacing the United States with a military partner of comparable scale, while Russia, China, and Pakistan are not yet able to fill the strategic vacuum that would emerge if the American military presence in the region were genuinely reduced. At the same time, the Gulf monarchies are looking increasingly closely at alternative arms suppliers, although none can yet offer a level of integration and logistical support comparable to that provided by the United States.
There is also a downside to Beijing’s oil intervention. As the world’s largest oil importer, China itself suffered from disruptions to supplies from the Gulf, including Iran. If sanctions on Tehran are eased as part of a possible agreement with the United States, Western investment could begin displacing the economic positions Beijing has accumulated in the Iranian market. The diplomatic burden is growing as well. Support for Iran complicates China’s relations with Arab states, particularly the United Arab Emirates, which became a target of Iranian strikes, while any criticism of Tehran risks damaging the Chinese-Iranian partnership built over many years. As Wang Jin puts it, balancing energy security, freedom of navigation, and simultaneous relations with both Iran and the Gulf monarchies is becoming an increasingly complex challenge for Chinese diplomacy.
Does Washington Have a Way Back?
To be fair, it is premature to write off American hegemony. The United States remains the world’s largest producer of oil and natural gas, and it was precisely the supply shortage caused by the blockade of Hormuz that temporarily strengthened its position as an energy power, unlike China, which was forced to draw down its reserves. Despite all the talk of its decline, the dollar still underpins the overwhelming majority of global trade and central bank reserves, and neither the yuan nor any other currency offers a realistic alternative to that role in the foreseeable future.
As Wang Jin correctly points out, the Arabian monarchies cannot physically abandon American weapons systems and logistics within a single political cycle, no matter how cold their current attitude toward Washington may be. The U.S. congressional midterm elections in November 2026 could alter the domestic political balance and, consequently, the direction of foreign policy well before the 2028 presidential election. Judging by his own writings, this is precisely the reversal Francis Fukuyama appears to be counting on, while warning at the same time that an abrupt policy shift undertaken while current American weakness persists could provoke Beijing into taking greater risks rather than restrain it.
What Comes Next: Three Scenarios Through the End of 2026
The future trajectory of the conflict and its geopolitical consequences will depend on several critical turning points that will be tested within the next few months.
The first scenario is a prolonged stalemate. The war continues without a decisive military outcome, Iran retains its missile capabilities, the Strait of Hormuz remains subject to intermittent restrictions, and China preserves its role as the informal regulator of the oil market at least through the end of 2026, gradually increasing imports as its own reserves are depleted.
The second scenario is a deal. Washington and Tehran reach an agreement to ease sanctions in exchange for restrictions on Iran’s nuclear program. Such an arrangement would open the Iranian market to Western investment and weaken the economic positions China has accumulated there. This is precisely the scenario Wang Jin fears.
The third scenario is the least likely but is identified by Fukuyama as a genuine risk. A shift in Washington’s priorities after the 2026 midterm elections, followed by an attempt to pursue a new course on Taiwan, could compel Xi Jinping to act faster and more aggressively than he had originally planned while America was still in the process of weakening itself.
Each of these three scenarios can be tested within a relatively short time frame. The continuation of a mixed regime of restrictions in the Strait of Hormuz without a formal peace agreement by the end of 2026 would confirm the first scenario. An increase of more than 20 percent in Chinese imports of Iranian oil within six months of a hypothetical lifting of sanctions would point to the second scenario unfolding in favor of the West rather than Beijing. A resumption of military assistance to Taiwan before the end of the calendar year would signal that Washington is retreating from its current policy of concessions to China.
Conclusion
Tehran has not won this war and is unlikely to do so. Washington does not acknowledge defeat and never will openly. Yet between those two facts stands Beijing, which has not fired a single shot and has nevertheless obtained almost everything it spent decades trying to achieve through foreign policy: a weakened rival, that rival’s unsettled allies, and global public opinion that, for the first time in twenty years, has tilted in China’s favor.
Beijing’s strategic culture has historically been built on patience rather than abrupt moves, from the centuries-long strategic contest over Taiwan to the gradual, decades-long construction of the Belt and Road Initiative. The Persian Gulf war required almost nothing from Xi Jinping beyond a single administrative decision: keeping several million barrels of oil in domestic storage. The world then began moving on its own in a direction favorable to Beijing.
Judging by the conspicuous coolness of his May meeting with Trump in Beijing, the Chinese leader understands perfectly well that the best strategy against a superpower that has forgotten how to calculate the cost of its own decisions is to remain calm and wait patiently until that superpower calculates the cost for itself. History has a way of vindicating those who know how to wait longer than their rivals, and 2026 appears increasingly likely to enter the history books as the moment when that ability proved more valuable to Beijing than any weapon.