The Proof of the Hormuz Pudding

Blockade and wait: the Asia-Pacific war scenarios, and why a regional war cannot be won. The West is arming for an invasion of Taiwan — the least likely option. The rational strategy is a blockade, and a blockade is won by whichever side can endure a sea-lane shutdown longest. In 2026 the Strait of Hormuz ran that experiment in the real world, and every prediction held.

1. The indicator: China survived the 2026 sea-lane shock

The 2026 closure of the Strait of Hormuz is the test case. It was an actual sea-lane closure, not a wargame, and each party behaved as this analysis predicts.

The closure: Iran blocked the strait from 28 February 2026, following the US–Israel air war on Iran. Pre-war transit of about 3,000 vessels a month collapsed to a near-total halt — down to 191 vessels at the April low, with the strait effectively shut for much of the closure. About a fifth of world seaborne oil and a fifth of LNG normally pass through it. War-risk insurance for a transit rose from 0.125 per cent to 0.2–0.4 per cent of hull value — an increase of about a quarter of a million dollars per supertanker voyage. Analysts called it the largest oil supply disruption in history, producing shortages of refined products, especially in Asia. The war ended by negotiated agreement on 14 June 2026.

Within that closure, China's response was the measured demonstration of who can survive a blockade:

• China's seaborne crude imports fell from about 11.39 million barrels a day (February 2026) to ~8.10 (April) to ~6.36 (May) — a near-decade low, a fall of roughly 44 per cent.
• That ~3 Mb/d reduction absorbed about 74 per cent of the total decline in global crude trade over the period, easing global prices.
• China sustained the cut on a strategic petroleum reserve estimated near 1.4 billion barrels; refinery run cuts to four-year lows; Russian and Central Asian pipeline crude; substitution into gas, NGLs and coal; and structural demand reduction (EVs at about half of new-car sales; 2024 was the first annual fall in Chinese oil demand in some twenty years). Combined stocks run to roughly 96 days of import cover.
• Australia holds about 30 days of diesel cover.

The disruption was external, partial, and lasted months. China absorbed it without rationing or shortage — and in doing so it substantially cushioned the rest of import-dependent Asia. Because China could cut roughly 3 Mb/d of demand, those barrels did not stay in the market bidding for the little oil still moving: China's cut absorbed about 74 per cent of the global decline in crude trade and helped ease prices for everyone else. Had China instead retained its pre-EV demand, that 3 Mb/d would have competed with Japan, South Korea, India and the other importers for constrained supply, driving prices higher and tightening physical availability across the region. China's capacity to cut demand acted as a relief valve for its neighbours during the shock. It was driven by self-interest, not generosity — but the benefit to the rest of Asia was real and substantial.

MMA position: this is a live readout of relative endurance, and it is the empirical basis of this memo. The scenarios that follow are modelled in wargames; Hormuz 2026 ran one version of them in the real world. China demonstrated it can ride out a sea-lane embargo. The maritime importers demonstrated the opposite.

2. Invasion is the least likely option

The Center for Strategic and International Studies' invasion wargame (The First Battle of the Next War, 24 iterations) found:

• The US, Taiwan and Japan usually defeat an amphibious invasion, but at high cost: dozens of ships, hundreds of aircraft, and tens of thousands of casualties; a large share of allied aircraft destroyed on the ground; Taiwan's economy devastated.
• China loses on the order of 10,000 troops, 138 major ships, 155 aircraft, and tens of thousands captured — losses sufficient to threaten Communist Party stability.
• The authors describe the likely US result as a pyrrhic victory.

The 2026 US Annual Threat Assessment judged that China has no fixed invasion timeline and will continue coercion short of war. Surveyed China specialists reject kinetic action by 2027 at roughly 83 per cent.

MMA position: invasion is the highest-cost, highest-risk, most-likely-to-fail option. The AUKUS submarine acquisition is structured around it.

3. Blockade is the likely option — and the counter-blockade is weakening

CSIS's blockade wargame (Lights Out?, 26 iterations; third in a series exceeding 70 iterations) found that a blockade is harder for all sides, plays out over a long and indecisive timeframe, and bears down hardest on Taiwan's energy supply (Taiwan imports about 97 per cent of its energy). The “joint blockade campaign” (联合封锁战役) is established PLA doctrine. Blockades generate escalation pressures that are difficult to contain; some iterations spiralled into general war.

A blockade does not require sinking every ship — though it can. It closes a sea lane by either of two routes that reach the same end: ships are attacked, or ships cannot obtain insurance and passage and stay in port. The two reinforce each other — a handful of attacked tankers makes the rest uninsurable — and the commercial route alone is sufficient: raise war-risk premiums and deter the shipping lines, and the route becomes unviable without a shot fired at most of the fleet. Either way, the lane closes.

And in a shooting war the kinetic route is no longer the uncertain proposition it once was. Satellite, over-the-horizon radar and drone surveillance have made the ocean surface largely transparent: a loaded tanker is a large, slow, radar-bright target that can be detected and tracked across a theatre. Long-range anti-ship missiles and drones — China's DF-21D and DF-26 among them — then hold any surface ship at risk from over a thousand kilometres away. This is not the blockade-running of the Second World War, when a darkened ship had a real chance of slipping through; a vessel that tries to run a contested lane today is found and targeted. Commercial closure and physical interdiction point the same way, and a wartime blockade of the lane should be treated as near-certain rather than as something a fleet can be relied on to keep open.

Hormuz 2026 demonstrated the commercial route directly: war-risk premiums rose sharply, transits all but stopped, and US government analysis noted that threats alone can produce “closure-like conditions” if shippers judge the cost of transit to exceed the benefit, regardless of whether every vessel is attacked. Earlier precedent: Houthi action closed much of the Red Sea to commercial traffic from late 2023 using limited means.

The standard rebuttal is that China is itself vulnerable to a distant allied counter-blockade, since it imports more than 70 per cent of its oil, much of it through the Malacca Strait. Two factors are eroding that rebuttal:

• Overland supply is rising. Power of Siberia 1 (~44 bcm/yr gas) is flowing; Power of Siberia 2 (+50 bcm/yr) was agreed in September 2025; pipeline crude arrives from Russia and Central Asia. These reduce China's seaborne energy exposure progressively over a multi-year timeline. (Caveat: PoS-2 is gas, not yet flowing, and most Chinese crude is still seaborne — the shift is directional, not complete.)
• US sustainment is in question. A multi-year distant blockade is a munitions- and presence-intensive campaign far from home. After the 2026 Iran war (see §6) the US faces interceptor and munitions stockpiles drawn down by roughly half, with replenishment measured in years. Whether the US could logistically enforce a sustained counter-blockade of China while also defending allied bases is unresolved.

MMA position: the blockade requires no flawless kill chain, and the counter-blockade that is supposed to deter it is becoming harder to mount.

4. The endurance asymmetry — including the export paradox

A blockade is won by whichever side can endure the disruption longest. China's resilience is structural and deliberate: pipelines (Power of Siberia 1 and 2; Central Asian crude) bypassing maritime chokepoints; petroleum reserves of roughly 96 days of cover; EVs at about half of new-car sales, high-speed rail, and the first national oil-demand decline in two decades; year-plus grain reserves and land borders with fourteen countries.

This is the product of a deliberate strategy. In November 2003 China's leader Hu Jintao named the “Malacca Dilemma” — the vulnerability of seaborne energy passing through a single strait — as a national-security problem. The two decades since produced the corrections: the China–Kazakhstan oil pipeline (2006), the Central Asia–China gas pipeline (2009), the China–Myanmar oil and gas pipelines bypassing Malacca (2013/2017), Power of Siberia 1 (2019) and 2 (agreed 2025); a strategic petroleum reserve begun in 2007; an electric-vehicle industrial policy from 2009 now supplying about half of new-car sales; and the world's largest high-speed-rail network. The maritime importers had the same twenty years. Australia used them in the opposite direction — two of its four refineries closed in 2020–21, reserves held below the IEA 90-day minimum since 2012, import dependence near 90 per cent. The asymmetry is not only structural; it is the difference between a state that identified the threat two decades ago and acted on it, and states that did not.

The maritime importers are on the other side: Japan, South Korea, and Taiwan (~97 per cent) import the bulk of their energy; Australia imports about 90 per cent of refined fuel and holds the lowest reserves in the developed world (~30-day diesel cover, below the 90-day IEA standard since 2012).

The export paradox: a blockade or regional war also severs China's containerised manufacturing exports, damaging the world's largest goods exporter and its export-led growth model. China bleeds. The asymmetry is not that China is unharmed; it is that continental depth and centralised political control let it absorb economic pain — and suppress the domestic political feedback that constrains democracies — for longer than an import-dependent island democracy can. The contest is one of relative pain tolerance, and the structure favours China.

MMA position: a nuclear-powered submarine is a sea-control and invasion-battle asset. It does not lift a blockade of a continent and does not make an import-dependent economy able to feed and fuel itself. Australia is acquiring capability for the less likely war and remains exposed in the more likely one.

5. The flashpoints

Taiwan is the centre of gravity but not the only trigger.

• South China Sea / Philippines — assessed by some analysts as the more likely site of a first clash. The Philippines is the only US treaty ally to take casualties from China since the Korean War (Second Thomas Shoal confrontations, 2023–24). US–Philippine exercises number in the hundreds in 2026; US Typhon missiles are deployed; a Japan–Philippines defence pact took effect in September 2025.
• East China Sea / Senkaku (Japan) — friction sharpened by Japanese government statements on Taiwan.
• Pratas/Dongsha — Chinese pressure on Taiwan's outlying South China Sea positions.
• Vietnam, Korean Peninsula, China–India border — additional triggers.

MMA position: the specific spark is secondary. Any of these can produce the wider maritime conflict that closes the sea lanes the import economies depend on.

6. How Australia is drawn in — and the democratic fault-line

Australia hosts a network of US facilities:

• Pine Gap (~45 antenna domes), integrated into US surveillance, targeting and nuclear warfighting. Analyst Paul Dibb states it must be treated as a nuclear target and that “if China attacks Taiwan, Pine Gap is likely to be heavily involved.”
• North West Cape — submarine communications.
• RAAF Tindal — rebuilt with fuel and munitions storage for up to six US B-52 bombers and a wartime strike role.
• RAAF Darwin — B-52 rotations; about 2,500 US Marines.
• HMAS Stirling — Submarine Rotational Force–West from 2027 (up to four US and one UK submarines), with a wartime mission supporting operations against China.

These facilities enable US strike and intelligence operations. An adversary determines combatant status by function, not by declaration: enablement is read as participation. In the 2026 Iran war, Pine Gap supported US operations, and US facilities on Australian soil sit on the target list of any power the US fights.

The US sustainment record from that war is documented:

• Against Iran, US forces expended close to half their stockpiles of several critical munitions — including Patriot and THAAD interceptors — within the first 39 days. (More than 200 THAAD interceptors, about half the inventory; 100-plus SM-3/SM-6; 1,000-plus of some 3,100 Tomahawks.)
• At that burn rate, analysts estimated roughly half the entire interceptor inventory would be exhausted in four to five weeks. Replenishment to pre-war levels is projected at up to four years.
• A US senator briefed on the figures stated the munitions are depleted and the country is less ready for a future western-Pacific conflict with China.
• The US strategic petroleum reserve fell to its lowest level since 1983.
• Attribution note: the US president publicly claimed a “virtually unlimited” munitions supply; the documented burn-rate data above is the objective record. The “four to five weeks” the president cited referred to projected war duration, not a stockpile figure.

Two implications follow. The supplier cannot sustain a high-intensity fight far from home. More fundamentally, the help the bases invite is the wrong kind for the war that occurs: no quantity of munitions lifts a blockade or feeds a population whose fuel and food have been cut off. Military force decides battles; it does not restock a strangled economy.

Australian public opinion is divided. Lowy Institute polling finds a majority favour neutrality in a US–China war, a majority would use the navy to help break a blockade of Taiwan, and a majority oppose sending troops to resist an invasion. No recent leader of either major party has publicly argued that Taiwan is a vital Australian interest. Proponents of the current posture argue it deters war and that defending Taiwan is a strategic interest.

MMA position: a blockade-and-wait strategy is designed to exploit exactly this division. A protracted, sub-threshold squeeze paralyses public consensus and political decision-making in a democracy while the economic clock runs down. The divided polling is not a side note; it is the fault-line the strategy targets.

7. What every scenario does to Australia

The outcomes converge:

• Invasion war: Australia is a targeted forward base in a conflict that wrecks the regional economy.
• Blockade war: Australia is an import-dependent economy on the wrong side of the endurance gap, its fuel and trade choked, while the bases it hosts draw fire.
• A widening South China Sea or East China Sea war: both at once.

The military winner varies. Australia's position does not: strangled as an import economy and struck as a forward base, with economic damage arriving regardless of the result at sea. The 2026 shock was a partial preview that ended only because the strait reopened on a deal. A deliberate blockade has no comparable off-ramp.

Nor does Australia's residual refining offer a fallback. Its two remaining refineries, Geelong and Lytton, already supply under a fifth of demand and run on imported crude — so a blockade starves them of feedstock without a shot fired at them. And as large, fixed installations they are precisely the targets modern strike campaigns destroy: Ukraine's 2024–25 drone and missile strikes put roughly a sixth of Russia's refining capacity out of action, distillation units offline for weeks once hit. In a war that reaches Australia, the refineries fail twice over — cut off from the crude they run on, and exposed as fixed targets that cannot be assumed to survive.

This is the lose-lose position at the centre of the policy question. Australia does not have to be the target to be hit: a regional war closes the sea lanes its fuel, food and trade depend on and severs the regional markets that are its largest — a supply-and-trade shutoff that is near-certain in every scenario, blockade or invasion alike, and that falls on Australia at the whim of a conflict it may not even be party to.

MMA position: the AUKUS submarine programme is built for none of this. It answers a naval battle, not a regional supply shutoff; it cannot make a tanker sail, lift an embargo or refill a reserve. A defence plan that leaves the most likely and most damaging contingency uncovered is, on its own terms, a plan that must be reviewed.

8. The conclusion: the war cannot be won

The central finding is consistent across every scenario: a war in the Asia-Pacific is devastating and cannot be won.

• The losses are mutual and severe. Taiwan is wrecked; Japan, Korea and the region are hit; the global economy contracts.
• Even the side that prevails at sea is left depleted — out of interceptors, drawing its oil reserve to forty-year lows, constrained to a settlement because supplies ran out.
• Only two powers endure as functioning nations: the US and China — a function of continental depth and distance from the battlefield, not of victory.
• Every other party bound to the fight, Australia first among them, is strangled, struck, and unable to be resupplied.

The response that follows from the facts is to avoid the war and reduce the conditions that produce it — to find peace and build a united Asia. As a programme:

• Build the nation — self-reliance in fuel, energy, food and industry, so Australia can feed and power itself when sea lanes are disrupted.
• Unite the region — act as the regional connector and convener, not a frontline.
• Make friendships — trade, energy exports and diplomacy with all parties, removing the economic incentive for any power to attack Australia.
• De-escalate the bases and equipment — wind back the foreign posture that confers target status without delivering protection the supplier cannot, on the 2026 evidence, sustain.

China's 2026 conduct is the available model for resilience: reduce demand, source supply where no navy can interdict it, hold a reserve, and avoid the war. This is the basis for action, not gratitude. The MMA position is AUASIA: a self-reliant, non-aligned Australia that can endure any regional war because it is bound to none — and that works to prevent the war by building a united Asia.

References

1. China's 2026 import response — seaborne crude imports ~11.39 Mb/d (Feb) → ~8.10 (Apr) → ~6.36 (May 2026, near-decade low); the ~3 Mb/d cut absorbed ~74 per cent of the global crude-trade decline and eased prices; sustained via strategic-reserve drawdown (~1.4 bn bbl), refinery run cuts to four-year lows, Russian and Central Asian pipeline crude, gas/NGL/coal substitution and EV/rail demand reduction; stocks ~96 days of cover; the import decline “driven by economic self-interest, not generosity.” (ChemAnalyst; Discovery Alert; Energy Connects; Columbia Center on Global Energy Policy; 2026.) The closure event: Strait of Hormuz blocked by Iran from 28 February 2026 (US/Israel air war); pre-war ~3,000 vessels/month → 191 in April (~5 per cent of normal); ~20 per cent of world seaborne oil and ~20 per cent of LNG normally transit; war-risk insurance 0.125 per cent → 0.2–0.4 per cent of hull value (~+US$250k per supertanker voyage); described as the largest oil supply disruption in history; shortages of refined products, especially in Asia; war ended by memorandum of understanding on 14 June 2026, oil flows projected to ~90 per cent of pre-war by July. (Wikipedia, “2026 Strait of Hormuz crisis”; US Congressional Research Service R45281; CNN / Kpler; CNBC / Rystad; Lloyd's List Intelligence; 2026.)
2. Structural demand — 2024 was the first annual Chinese oil-demand decline in about 20 years (CEPR / Bank of Italy); EVs about half of new-car sales; IEA “plateau”; Sinopec / CNPC place peak demand at ~15.4–16 Mb/d. The structural-peak thesis is contested (OilPrice, December 2025: 2025 imports up ~5.8 per cent to 11.65 Mb/d); the 2026 wartime import collapse is hard tanker-tracking (Kpler) data.
3. Invasion wargame — CSIS, The First Battle of the Next War (24 iterations): defenders usually win at heavy cost (dozens of ships, hundreds of aircraft, tens of thousands of casualties; ~90 per cent of allied aircraft lost on the ground; Taiwan's economy devastated); China loses ~10,000 troops, 138 ships, 155 aircraft, ~30,000 captured; a possible “pyrrhic victory.”
4. Intelligence picture — ODNI 2026 Annual Threat Assessment: no fixed PRC invasion timeline, continued coercion; ~83 per cent of China experts reject kinetic action by 2027.
5. Blockade wargame — CSIS, Lights Out? Wargaming a Chinese Blockade of Taiwan (26 iterations, 2025; series of 70-plus iterations): harder, longer, indecisive; targets Taiwan's energy (~97 per cent import-dependent); “joint blockade campaign” established PLA doctrine; escalation hard to contain; CSIS “does not take a position on likelihood.” Uninsurable-lane mechanism; Houthi Red Sea precedent (late 2023–).
6. Counter-blockade and pipelines — China imports more than 70 per cent of its oil, much via Malacca; Power of Siberia 1 (~44 bcm/yr) flowing, Power of Siberia 2 (+50 bcm/yr) agreed September 2025, plus Central Asian crude, progressively reducing seaborne exposure (PoS-2 gas, not yet flowing; most crude still seaborne). US sustainment constraint per reference 9.
7. Endurance and export paradox — China resilience (pipelines, ~96-day reserves, EVs about half of sales, high-speed rail, year-plus grain, fourteen land borders) versus maritime importers Japan, Korea, Taiwan (~97 per cent) and Australia (~90 per cent refined fuel, ~30-day cover). Deliberate over two decades: “Malacca Dilemma” named 2003; China–Kazakhstan oil pipeline (2006); Central Asia–China gas pipeline (2009); China–Myanmar oil/gas pipelines (2013/2017); Power of Siberia 1 (2019) and 2 (agreed 2025); strategic reserve begun 2007; NEV policy from 2009; world's largest high-speed-rail network. Australia over the same period: two of four refineries closed 2020–21, reserves below the IEA 90-day minimum since 2012, ~90 per cent import dependence. China is the world's largest goods exporter; a blockade or war severs containerised exports and damages its growth model — mutual harm, with continental depth and centralised political control conferring higher and longer pain tolerance than an import-dependent democracy.
8. Flashpoints — South China Sea / Philippines (likely first clash; only US treaty ally to take China casualties since Korea; Second Thomas Shoal 2023–24; hundreds of US–Philippine exercises in 2026; US Typhon; Japan–Philippines pact September 2025); Senkaku / Japan; Pratas / Dongsha; Vietnam; Korea; China–India.
9. US sustainment — 2026 Iran war: about half of several key munition stockpiles (Patriot / THAAD interceptors; 200-plus THAAD, about half the inventory; 100-plus SM-3/SM-6; 1,000-plus of some 3,100 Tomahawks) expended in the first ~39 days; about half the entire interceptor inventory in four to five weeks at the burn rate; replenishment up to four years (Defense Secretary: “months and years”). A US senator (briefed): munitions depleted, the US less ready for a western-Pacific fight with China. The US strategic petroleum reserve fell to its lowest since 1983. The US president publicly claimed a “virtually unlimited” supply (Truth Social, 2 March 2026) — the burn-rate data is the objective record; the “four to five weeks” cited was projected war duration. (CSIS; Washington Post; Al Jazeera; National Security Journal; Military Times; 2026.)
10. Australia's facilities — Pine Gap (~45 antenna domes; US targeting and nuclear warfighting; Paul Dibb: a nuclear target, and “if China attacks Taiwan, Pine Gap is likely to be heavily involved”); North West Cape; RAAF Tindal (up to six US B-52s, wartime strike); RAAF Darwin (B-52s, ~2,500 Marines); HMAS Stirling (Submarine Rotational Force–West from 2027, up to four US and one UK submarines, wartime mission). “Enablement reads as participation” (Defence Connect, 2026); the 2026 Iran war as live demonstration.
11. Public opinion and coercion design — Lowy Institute: a majority favour neutrality in a US–China war; a majority would use the navy to help break a Taiwan blockade; a majority oppose troops to resist an invasion; no recent leader argues Taiwan is a vital Australian interest. Proponents' counter-case: deterrence value; strategic interest in defending Taiwan. Protracted sub-threshold coercion is designed to fracture democratic political consensus while economic pressure accumulates.

China is treated here as a strategic actor; the memo takes no position on the morality of any party, only on what each scenario does to Australia. Companion memos: Memo 31 (the diagnosis); the forthcoming Self-Reliant Nation and Sovereign Fuel (self-reliance); the forthcoming Neutral Uniter (armed neutrality and the connector role); and From AUKUS to AUASIA (the realignment).