China Evades Hurdles to Get Mideast Oil --- Beijing reaps the benefits of steady partnerships with Tehran and its foes

 

 

“Wartime disruptions at two shipping chokepoints in the Middle East are sending shock waves through global markets. China has still found a way to get oil from the region.

 

Iran-backed Houthis in Yemen last week began to attack Saudi-linked oil tankers at the Bab al-Mandeb Strait, expanding the Iran conflict and disrupting a Red Sea route that Saudi Arabia has used to bypass the Strait of Hormuz and deliver oil to customers in Asia. But the rebels gave safe passage to two Chinese oil tankers carrying Saudi oil through the Bab al-Mandeb. Both ships broadcast "Chinese crew and owner" as they sailed.

 

At least two more China-bound supertankers, loaded with Saudi oil, have since cleared the strait. The rebels appear to be holding fire on behalf of Iran's friends.

 

Across the Arabian Peninsula at the Strait of Hormuz, the resumption of a U.S. blockade and the threat of Iranian attacks have impeded the transit of oil tankers. That hasn't stopped China from importing Iranian oil by drawing on a floating reserve off Malaysia, an established channel that circumvents U.S. sanctions.

 

"Fuel security is a major geopolitical lever and China has historically been in a vulnerable position as a big importer, but they've gone to great lengths to reduce that vulnerability," said Saul Kavonic, head of energy research at MST Financial, a Sydney-based financial services firm. Iran's continued influence in Hormuz "strengthens the hand of China with regard to that geopolitical leverage."

 

How China has worked around blockades that have disrupted global markets shows the benefits of Beijing's longtime position as both a financial lifeline to Iran and a customer for its foes.

 

The China connection is so useful that, at the height of the war in March, some Chinese crewmen said they would display Chinese flags on their vessels' decks to win safe passage through the Strait of Hormuz, even if their ships weren't Chinese-flagged.

 

That tactic hasn't always worked. In May, Iran struck the Marshall Islands-flagged tanker JV Innovation, despite its Chinese owner and mostly Chinese crew, triggering a fire on deck. Beijing said it was "deeply concerned" about vessels stranded in the strait, and called for restoring unimpeded passage. But China has done little to rein in Iran and has provided it with diplomatic support.

 

China buys about 90% of Iran's oil exports -- helping Tehran endure punishing sanctions -- but also buys oil from Saudi Arabia, a rival to Iran. Before the war, nearly half of China's crude-oil imports passed through the Strait of Hormuz.

 

China has shown during the war that it can sway global oil markets by cutting its imports. Iranian oil arriving in China this year declined from a high of 1.7 million barrels a day in March, before the U.S. blockade began, to 785,000 barrels a day in June and 523,000 in July, according to data from Kpler, a commodity research firm.

 

China's ability to work around chokepoints gives it access to cheap Iranian oil despite the war and the U.S. naval blockade. The share of Iranian crude in China's total imports climbed to more than 24% in May and 18% in June, compared with 15% in February, according to ship-tracking company Vortexa. Officially, China hasn't logged any imports of Iranian oil since 2022.

 

Iran appeared to take advantage of a monthlong pause in the U.S. blockade to rush out oil exports, exporting about $5 billion to $6 billion in oil before the blockade resumed in mid-July, analysts said.

 

Those shipments headed to an area off the coast of Malaysia where tankers from Iran unload oil to vessels that continue onward to China, a sanctions-evasion strategy.

 

Long-established goods trade between Iran and China also got a boost by the temporary lifting of the blockade, according to a Wall Street Journal review of maritime-traffic data. The volume of Iran-flagged cargo ships visiting Chinese ports dropped after the war started, and jumped after the U.S. blockade paused in mid-June, the data show. After the blockade resumed, at least 10 such ships were seen in or just outside Chinese ports.

 

Those ships carry anything from consumer goods to machinery from Chinese ports. Iranian cargo ships have been accused of transporting chemicals from China used to help power Iranian missiles.

 

While the Houthi rebels bring their fight against Saudi Arabia to the Bab al-Mandeb, two Chinese supertankers crossed the strait loaded with oil from the Saudi Aramco-ExxonMobil refinery on Thursday -- and are headed to China. Over the weekend, two China-bound, Hong Kong-flagged supertankers exited the Red Sea via Bab al-Mandeb loaded with Saudi crude. Two empty Chinese supertankers are still in the Red Sea, awaiting orders.” [1]

 

1. World News: China Evades Hurdles to Get Mideast Oil --- Beijing reaps the benefits of steady partnerships with Tehran and its foes. Austin Ramzy; Feng, Rebecca.  Wall Street Journal, Eastern edition; New York, N.Y.. 29 July 2026: A7.