Michal Meidan

in terms of kind of that operational running of the Chinese economy.

The repayment of the loans that were given by the China Development Bank to the government in PDVSA, the Venezuelan national oil company, that's a problem if those flows stop because debt repayment has stopped.

And finally, where it gets really problematic is the sort of myriad of Chinese contracts in Venezuela.

That's in the oil sector, in the upstream, but it's also in telecoms, in mining, in sort of ports and infrastructure.

If those get cancelled, that's a financial loss.

Not the first time the Chinese companies or banks will have to restructure debt or lose some of their assets, but geopolitically, as you mentioned, it's quite a big deal.

It is a massive risk.

And the Chinese are also looking at Iran as a potential next destination for US actions.

That already starts to add up to sort of already close to one third of China's imports.

I think one thing is that oil markets have found a way around sanctions.

There's a very sophisticated sanctions evasion mechanism that works.

It's what's called the dark fleet, right, of all those tankers that sail around and

and move crude from one place to the other, a very sophisticated financing system and middlemen.

So oil tends to find a way around sanctions.

It makes it harder, it makes it more costly, but it's possible.

I think the other thing to note is that China has been hedging quite actively against sort of oil insecurity for many, many decades.

As part of that, it's got a very big stockpiling program.

It now has maybe 120 days of forward cover, sort of meaning that if supplies were disrupted, it could draw down on stocks.

Not something that it necessarily wants to do, but it helps to manage some of the price volatility.

And longer term, China's electrifying very rapidly.