DDL: China's commodity stockpiles are not what they seem

This is still the Blind Spot's daily Discord linkfest, we've just decided to put the news in the headline to jazz up your inbox.

Apr 29, 2026

This is still the daily Discord linkfest; I’ve just rejigged the headline formatting to make it more clickable, innit?

The linkfest below has been compiled using links posted in the Blind Spot’s Discord community over the past 24 hours. The links and summaries have been loosely quality-controlled in the AI-assisted compilation process. However, caveat emptor, because not everything has been rigorously fact-checked, and not all sources are necessarily credible. The best way to view this post is on the main website, so please click the title to take you there.

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Izabella Kaminska@izakaminska

All these clever takes miss one fundamental point. Thanks to sanctions China has been operating as an oil purchasing monopsony for at least five years. This means it’s been drawing a huge economic dividend in energy terms from not adhering to the rules based order. This boon has

James E. Thorne @DrJStrategy

Food for thought. The age of cartel scarcity is ending The United Arab Emirates’ decision to leave OPEC is not just another quarrel inside an oil cartel. It is a move in the New Great Game taking shape across energy, trade routes and strategic commodities. For years, Abu

2:01 AM · Apr 29, 2026 · 19.1K Views

15 Replies · 29 Reposts · 95 Likes

A quick supplementary note on the above.

My brain works in mysterious ways. It is deeply irked when it can’t make sense of apparent contradictions, especially regarding how financial plumbing interacts with economic and geopolitical reality. This leads to a lot of agonising deep thought. Every now and then, however, a critical bit of new information comes my way that serves as a type of skeleton that’s capable of unlocking a whole new level of understanding. This often floods the zone and hinders my ability to explain the connections to others.

Suffice it to say, I’ve had a bit of a Robert Langdon-style enlightenment moment of this variety the past two days. It’s connected to the above, but also to my legacy work on contango and Chinese commodity warehousing shenanigans. Jamie Dimon’s predictions about Europe also feed in. Explaining the schematic behind this understanding is complex. I hope one day to be able to refine it into a narrative or parable that makes sense on a much broader level. For now, explaining why I think what I think will take more word count than anyone has time to read. Therefore, rather than try, I will just share my conclusion: China’s commodity stockpiles are not what they seem. They are, if anything, a liability for its economic model rather than an asset. If I’m right, then I will be able to make effective forecasts based on this understanding. If I’m wrong, I won’t. I will share these forecasts behind the paywall later today.

As James Aitken, one of the great systems thinkers in the market, likes to say, the trick sometimes isn’t to be completely right. It is to be less wrong than everyone else.

Summary

The second-order consequences of the Hormuz crisis are now stretching to Canadian mortgage books and Chinese port inventories. At the centre sits the oil complex. Iranian oil exports continue their downward trajectory, storage utilisation is constrained by technical and geographical limits, and cumulative production shut-ins across the Middle East are compounding exponentially rather than linearly—effectively a permanent loss of barrels rather than a temporary flow disruption. Brent’s price action, as one observer dryly noted, is already trading as though expecting World War One Hundred and Eleven. OPEC itself appears to be entering its terminal phase: the UAE’s formal departure effective May 1 has plunged the cartel into open crisis, confirming long-standing suspicions that the arrangement could not indefinitely contain members’ desire for unconstrained production, especially once spare capacity and security alignments began to diverge. Saudi Aramco’s extension of suspended LPG deliveries through May only reinforces the sense of contractual stress.

China’s response has been characteristically transactional. LNG imports have plummeted, substituted by piped gas and domestic coal, while state refiners seek permits to resume fuel exports amid plentiful domestic stocks. Beijing continues to lift Iranian barrels with apparent disregard for American sanctions, is in talks to release dozens of its vessels trapped in the region, and has even seen the first LNG shipment slip through Hormuz since hostilities widened. The circuit-board supply chain has not escaped unscathed; Iran-related disruptions are feeding cost pressures that ultimately appear at the supermarket checkout—Australia’s “double-headed monster” of plastic and energy inflation being only the most vivid local manifestation. Japan’s crude inventory draws suggest the tightness is already transmitting to Northeast Asia.

These energy shocks coincide with, and partially explain, a noticeable Canadian policy surge. The launch of the C$25bn Canada Strong Fund—a sovereign wealth vehicle seeded by federal capital and directed toward both conventional energy and critical minerals—arrives alongside new regulatory levers that critics argue could hold resource developers hostage. Mortgage arrears have reached a 12-year high, Rogers is offering buyouts to half its workforce, and infrastructure banks created in an earlier era of optimism are quietly being repurposed. The broader financial picture is equally strained: hedge-fund repo borrowing has reached a record $3.4 trillion, Jamie Dimon warns openly of “some kind of bond crisis,” and Russia is confronting an acute yuan shortage that has its central bank contemplating mandatory yuan reserves for lenders. Paul Tudor Jones’s observation that the United States is more dependent on equity prices than at any prior historical juncture adds a layer of domestic vulnerability should a 35 percent correction materialise.

Layered atop the macroeconomic stress are persistent institutional patterns. Canadian media outlets remain heavy consumers of federal grants; Irish journalism, according to multiple accounts, operated under an informal directive that Trump coverage must be negative. Teachers’ unions in the United States have routed more than $1 billion into political causes over the past decade. COVID-era accountability continues its slow legal unwind, with a former NIAID official indicted on charges of conspiracy, evidence destruction, and false statements. Meanwhile, Goldman Sachs has suspended its bankers’ use of Anthropic’s Claude in Hong Kong, hedge-fund recruiters report an observable decline in raw analytical talent among new graduates, and China’s real-estate market has hit its lowest price levels in at least two decades.

DDL: China's commodity stockpiles are not what they seem

This is still the Blind Spot's daily Discord linkfest, we've just decided to put the news in the headline to jazz up your inbox.

Troll of the day

Blind spot of the day

Summary

Commodities

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China

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