Is China Plotting A Coup In Hormuz? Top Indian Fund Star Sounds Alarm

A Chinese power grab over the world's most vital oil artery is no longer a distant risk but an emerging reality, as US-Iran tensions push the Strait of Hormuz toward a prolonged geopolitical showdown.

Donald Trump intensified the crisis with a direct threat to Tehran. "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," he wrote on Truth Social. LIVE UPDATES

Iran responded with a blunt 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.

But beyond the immediate brinkmanship, investors are increasingly focused on a deeper shift in global power.

Saurabh Mukherjea of Marcellus Investments laid out a stark scenario. "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 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." 

China's Oil Playbook

That view is reinforced by Abdullah Baabood of Carnegie, who says that China's dependence on Gulf oil has steadily transformed into strategic ambition. As Beijing became the world's largest crude importer, securing uninterrupted energy flows through Hormuz turned critical to its national interest.

China has already been bypassing US sanctions to import heavily discounted Iranian oil, making Tehran one of its top suppliers. A 25-year strategic partnership signed in 2021 has deepened that relationship, pairing cheap oil with large-scale Chinese investment and opening the door to expanded influence, including potential military cooperation.

At the same time, China has widened its footprint across the Gulf. It has invested billions into ports in the UAE, Oman, Iran, and Pakistan, while building pipelines and rail networks that strengthen trade connectivity and reduce reliance on Hormuz bottlenecks. 

Its economic reach now spans infrastructure, telecom, energy, and even defense-linked sectors across Gulf Cooperation Council nations.

While Beijing still lacks the military depth to replace the United States as the region's security anchor, Baabood argues that shifting US engagement and growing Gulf hedging between Washington and Beijing are creating space for China to expand its influence.

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."