China In Talks With Iran To Allow Safe Oil & LNG Ship Passage Through Strait Of Hormuz As War Disrupts Global Energy Route

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China is in talks with Iran to allow crude oil and Qatari liquefied natural gas (LNG) vessels safe passage through the Strait of Hormuz as the war involving the United States, Israel and Tehran disrupts one of the world’s most important maritime routes.

The conflict, now in its seventh day, has sharply reduced tanker traffic through the narrow waterway, which carries about one-fifth of global oil and LNG supplies.

The disruption has raised crude oil prices by more than 15% and left hundreds of vessels stranded in the region.

China depends heavily on energy imports from the Middle East. About 45% of its crude oil imports pass through the Strait of Hormuz, making uninterrupted access crucial for its economy.

Sources said China is concerned about Iran’s restrictions on shipping and has asked Tehran to allow safe passage for vessels carrying crude oil and Qatari LNG cargoes.

Earlier this week, Iran said ships linked to the United States, Israel, European countries and their allies would not be allowed to transit the strait. China was not mentioned in the announcement.

Shipping activity in the strait has dropped sharply since the fighting began.

According to vessel-tracking firm Vortexa, crude tanker transits fell to just four vessels on March 1, the day after hostilities started. Since January, the average had been around 24 tanker transits per day.

Data from Vortexa and Kpler also shows that around 300 oil tankers are currently inside the Strait of Hormuz.

Some ship movements have continued under special circumstances. Ship-tracking data showed that a vessel named Iron Maiden crossed the strait after reportedly changing its signal to show it was “China-owned.”

However, analysts say many more ships will need to move through the strait before energy markets stabilise. Industry sources say only a small number of ships are currently passing through the waterway.

Mike McDougall, a veteran in the global sugar trade, told Reuters that Middle East sugar executives have seen a few ships transiting the strait, most of them Chinese- or Iranian-owned.

Jamal Al-Ghurair, managing director of Dubai-based Al Khaleej Sugar, said some ships carrying sugar cargoes have been allowed to pass while others remain blocked, though he did not explain the criteria.

Energy markets have reacted quickly to the disruption. Oil prices have risen more than 15% since the conflict began.

The crisis has also increased regional tensions. Iranian missiles have reportedly reached Cyprus, Azerbaijan and Turkey.

Governments and economists have warned that prolonged disruption in the Strait of Hormuz could lead to higher energy prices and increase global inflation.

The Strait of Hormuz is one of the world’s most important maritime chokepoints. The narrow passage connects the Persian Gulf with the Arabian Sea and carries about 20% of global oil and LNG shipments.

Any long-term disruption could affect energy supplies to major Asian economies, including China, Japan, South Korea and India.

References: Reuters, Firstpost

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