Chinese Oil Giants Stop Sending Tankers Via Hormuz, Bab al-Mandab Amid Middle East Conflict

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