Is China Plotting A Coup In Hormuz? What Top Indian Fund Expert Has To Say

Last Updated:April 06, 2026, 12:22 IST

The Strait of Hormuz is increasingly caught in rising US-Iran tensions, turning what was once a distant risk into an emerging geopolitical flashpoint.

Saurabh Mukherjea of Marcellus Investments warned that China could seize a strategic advantage in global energy by partnering with Iran to control the Strait of Hormuz, the world’s most vital oil artery. He said that such a move would give China unprecedented influence over the oil supplies of much of the world.

“My reading is China will now move in. China will ally with Iran and make sure that between China and Iran they control the Strait of Hormuz and thus the oil supplies of much of the world, which will be a terrific coup for China," Mukherjea told NDTV.

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The Strait of Hormuz is increasingly caught in rising US-Iran tensions, turning what was once a distant risk into an emerging geopolitical flashpoint.

Donald Trump intensified the crisis with a direct threat to Tehran on Truth Social, writing, “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the F******’ Strait, you crazy bastards, or you’ll be living in Hell – JUST WATCH! Praise be to Allah."

Iran responded with a stark warning. Parliament Speaker Mohammad Bagher Ghalibaf said, “Your reckless moves are dragging the United States into a living HELL for every single family," accusing Trump of acting under Israeli influence.

As tensions mount, analysts are closely watching the potential realignment of power in the West Asia and its impact on global energy security.

Abdullah Baabood of Carnegie reinforces this perspective, noting that China’s reliance on Gulf oil has evolved into a broader strategic ambition. As the world’s largest crude importer, Beijing now views uninterrupted energy flows through the Strait of Hormuz as essential to its national interest.

China has already circumvented US sanctions to purchase heavily discounted Iranian oil, making Tehran a key supplier. The 25-year strategic partnership signed in 2021 has strengthened this bond, combining cheap oil with large-scale Chinese investment and paving the way for expanded influence, including potential military cooperation.

Beyond Iran, China has extended its presence across the Gulf, investing billions in ports in the UAE, Oman, Iran, and Pakistan. It has also developed pipelines and rail networks that enhance trade connectivity and reduce reliance on the Strait of Hormuz.

Chinese economic influence now spans infrastructure, telecom, energy, and even defense-related sectors throughout the Gulf Cooperation Council nations. While Beijing still lacks the military capability to replace the United States as the region’s security guarantor, Baabood observes that shifting US engagement and growing hedging by Gulf states between Washington and Beijing are creating opportunities for China to expand its sway.

Mukherjea said that this was not a short-term flare-up. “This is a tussle for oil and Hormuz. This is a tussle for strategic power. And unfortunately, this is not going to end very quickly," he said, adding, “the tussle for control of Hormuz I think will persist for many months."

For India, the implications are immediate and severe. “Even before the conflict the Indian economy was in trouble," Mukherjea said, pointing to weak earnings growth and slowing momentum. Now, “we’ll have to work with expensive oil…a weak rupee, and rising interest rates."

He warned that the economic strain will intensify across households and markets. “The consumption story is starting getting challenged," he said, citing weak white-collar job creation and rising debt. “It is but inevitable we will see EPS cuts on consumption plays and the valuations will start getting increasingly questioned."

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