Despite the U.S.-Israeli conflict with Iran jeopardizing broader supplies through the critical Strait of Hormuz, Iran has continued to send significant crude oil shipments, primarily to China. These shipments, monitored by firms like TankerTrackers.com and Kpler, have continued even as vessel tracking systems have been turned off and attacks have occurred within the waterway. While overall export levels are lower than pre-war figures, China has been actively building oil reserves, suggesting a strategic stockpiling effort in anticipation of further supply risks. Iran is also exploring alternative export routes, such as the Jask oil terminal, though its logistical efficiency remains uncertain.
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Despite threats to close the Strait of Hormuz amidst the U.S.-Israeli conflict with Iran, significant crude oil shipments continue to flow, primarily towards China. Monitoring firm TankerTrackers estimates at least 11.7 million barrels have passed through the strait, with Kpler estimating around 12 million barrels, although confirming final destinations has become challenging as vessels go “dark.” While traffic in the critical waterway has slowed and tanker attacks have occurred, Iran has also resumed loading at the Jask oil terminal, potentially offering an alternative route, though its logistical advantage is debated. Even with these shipments, Iran’s overall exports are lower than pre-war levels, a contrast to China’s accelerated efforts to build oil stockpiles in anticipation of supply disruptions.
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US sanctions targeting Chinese oil infrastructure and Russian energy firms have significantly reduced flows of Russian and Iranian oil into China, the world’s top oil importer, with Chinese seaborne imports of Russian crude potentially dropping by two-thirds. This shift follows sanctions on major Russian oil producers and a key Chinese port, impacting Iranian shipments as well. While state-owned Chinese refiners have paused purchases, smaller private refineries are also showing caution, influenced by EU and UK blacklistings, resulting in a glut of unsold oil and lower prices. Despite the slowdown, some ports and traders are circumventing restrictions through practices like ship-to-ship transfers, suggesting that the impact may be temporary.
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John Q. Hosedrinker