Chinese Oil Giants Stop Sending Tankers Via Hormuz, Bab al-Mandab Amid Middle East Conflict
Our take
The recent shift in shipping routes by Chinese oil tankers, opting for ship-to-ship transfers in the Gulf of Oman and near Fujairah rather than traversing the Strait of Hormuz and Bab al-Mandab, represents a significant recalibration of maritime trade strategy driven by escalating geopolitical tensions in the Middle East. This maneuver, as reported, reflects a pragmatic response to the increased risk of disruption in vital chokepoints. It’s a development that resonates with broader trends observed in regional maritime activity, notably the weakening of Iran’s influence over the Strait of Hormuz, as evidenced by Iran’s Grip On Strait Of Hormuz Weakens As Over 80% Of Ships Use Omani Route. The implications extend beyond immediate shipping logistics, impacting global energy markets and potentially reshaping regional power dynamics.
The adoption of ship-to-ship transfers—where tankers meet at sea to exchange cargo—is inherently more complex and costly than direct transit. However, the perceived security benefits currently outweigh these drawbacks. The ongoing conflict in the region, and the potential for escalation involving naval forces, has demonstrably increased the risk profile of traditional routes. This isn’t solely about avoiding direct confrontation; it also encompasses mitigating the risk of seizure or disruption by non-state actors. Furthermore, the situation highlights the interconnectedness of global trade and energy security. The increased demand for alternative routes and logistical solutions underscores the need for robust, real-time ocean intelligence to monitor and adapt to rapidly evolving circumstances. The shift is also connected to broader trade patterns; Vietnam’s recent move to reduce import duties on diesel from India, allowing Vietnam Receives First Direct Diesel Shipment From India In 8 Years, demonstrates a diversification of supply chains away from traditional sources, further emphasizing the need for adaptable shipping strategies.
The scale of this adjustment – involving Chinese and Hong Kong-owned vessels – suggests a concerted effort to de-risk supply lines. China, as the world’s largest oil importer, has a vested interest in ensuring the uninterrupted flow of energy resources. This shift reveals a willingness to absorb additional costs associated with ship-to-ship transfers to safeguard that vital supply. It’s crucial to consider the broader maritime security landscape; Indonesia’s recent seizure of a substantial quantity of methamphetamine from a Tanzanian vessel in Riau waters Indonesia Seizes 2.6 Tons Of Liquid Meth From Tanzanian Ship In Riau Waters serves as a stark reminder of the diverse security threats present in these waters, extending beyond geopolitical conflicts and encompassing transnational crime. These concurrent developments highlight the increasing complexity of maritime operations and the necessity for integrated data ecosystems capable of providing a holistic view of ocean activity.
Looking ahead, the long-term sustainability of this shift remains to be seen. While the current geopolitical climate justifies the increased cost of ship-to-ship transfers, a prolonged period of instability could incentivize further diversification of trade routes and investment in alternative energy sources. The reliance on ship-to-ship transfers also presents new challenges in terms of environmental monitoring and regulatory oversight. Will this trend lead to a permanent reconfiguration of maritime trade patterns, or is it a temporary adaptation to a volatile situation? The ongoing evolution of maritime security protocols and the development of calibrated risk assessment models will be critical in navigating this complex landscape and ensuring the resilience of global supply chains.
Two of China’s biggest state-owned oil shipping companies have stopped sending tankers through the Strait of Hormuz and Bab al-Mandab, and are instead using ship-to-ship transfers outside the Gulf to keep oil moving.
COSCO Shipping Energy Transportation and China Merchants Energy Shipping (CMES) have kept their tankers out of both waterways since late July, according to tanker tracker Vortexa and a ship broker.
The decision followed communications with Chinese central authorities, according to a state oil trading executive and two Chinese shipping executives familiar with the matter.
The move affects a large part of China’s oil shipping network. Together, the two companies control more than 100 very large crude carriers (VLCCs), each able to carry about 2 million barrels of oil.
Before the Iran war began in late February, they handled about half of China’s crude imports from the Middle East, excluding sanctioned Iranian oil.
Chinese tankers use new loading points
Instead of sending tankers through the two chokepoints, Chinese and Hong Kong-owned vessels are increasingly using ship-to-ship transfers in the Gulf of Oman and near Fujairah in the United Arab Emirates.
Kpler data showed that ship-to-ship transfers involving China- and Hong Kong-owned vessels in the Gulf of Oman rose to more than 600,000 barrels per day in June and July.
There was no such activity in April and May, while volumes were below 30,000 barrels per day in each of the first two months of 2026.
A Chinese shipping executive said vessels were using new ship-to-ship transfer points outside the Gulf, including waters near Omani ports and Fujairah. Gulf crude is transferred there to vessels heading toward Asian buyers.
Four COSCO-operated supertankers and one CMES tanker loaded oil through ship-to-ship transfers at Fujairah in July, according to Vortexa.
A ship broker said about a dozen supertankers controlled by each company were scheduled to load outside the Gulf between August and mid-September. Most were expected to load at Fujairah or at ports in or near Oman, mainly after being chartered by Chinese refiners.
Tanker Earnings Increase
Avoiding the two waterways has also increased tanker earnings.
The Oman-China route was assessed at about $140,000 per day last Friday, according to a Chinese shipping executive. The daily margin was about $110,000 per tanker, compared with around $30,000 to $40,000 before the Iran war for a VLCC on a similar route.
An executive at one of the state-owned shipping companies said supertanker utilisation had fallen since the war began. Many vessels have been moved onto longer routes to the Atlantic and the Americas.
“The tankers remain engaged, but (they are) sailing longer voyages, experiencing longer waiting time amid greater uncertainty,” the executive said.
CMES confirms Hormuz restrictions
CMES told investors in late July that its vessels would not enter the Strait of Hormuz for the time being. It also said other shipping companies had avoided Bab al-Mandab, although it did not specifically say whether its own vessels were avoiding the passage.
The Strait of Hormuz lies between Iran and Oman and is an important route for global oil shipments. Bab al-Mandab connects the Red Sea with the Gulf of Aden and provides access toward the Suez Canal and Europe.
Both routes have been heavily disrupted during the conflict. Yemen’s Houthis declared a maritime embargo against Saudi Arabia on July 20, while the Strait of Hormuz has remained largely closed after a short U.S.-Iran interim peace deal reached in June collapsed.
The two Chinese state shipping companies do not carry Iranian oil because of sanctions, according to traders and analysts.
Chinese customs data showed that China’s crude imports from the Middle East, excluding sanctioned Iranian oil, averaged 4.9 million barrels per day last year. Most of the oil was shipped in VLCCs.
Tanker routes change after Houthi blockade
Coslucky Lake, one of the last COSCO tankers to enter the Red Sea to load Saudi oil at Yanbu before the Houthi blockade, changed course in early August.
Kpler tracking showed the tanker sailed without cargo through the Suez Canal and later loaded Saudi oil at Sidi Kerir, Egypt’s Mediterranean port, instead of returning to Yanbu.
China has so far kept oil supplies moving by changing shipping and loading arrangements.
Other alternatives include greater use of Saudi Arabia’s Red Sea export terminals and Oman’s Duqm as a transshipment hub.
References: Reuters, Gulf News
Read on the original site
Open the publisher's page for the full experience