Iran sends millions of barrels to China through Strait of Hormuz even as war chokes waterway

According to ship-tracking data, Iran continues to send large volumes of crude oil to China through the Strait of Hormuz even as the war between the US-Israel and Iran has cut off vast supplies through the critical waterway.

Iran has sent at least 11.7 million barrels of crude oil through the Strait of Hormuz since the war began on February 28, all of which has gone to China, TankerTrackers co-founder Samir Madani told CNBC on Tuesday.

The agency monitors ship movements with satellite imagery, allowing it to capture undetected vessels if their tracking systems are switched off. Many of the ships have “gone dark” after Tehran threatened to attack any ship that tried to pass through the waterway.

Shipping intelligence data provider Kpler estimates 12 million barrels of crude oil have passed through the strait since the war began. “Since China has been the primary buyer of Iranian crude in recent years, a significant share of these barrels could eventually go there,” said Nhway Khin Soe, crude analyst at Kpler, adding that confirming the final destination for these ships is more challenging.

China’s National Energy Administration did not immediately respond to CNBC’s request for comment.

The Strait of Hormuz, a narrow waterway critical for transporting about a fifth of the world’s oil and gas, has seen shipping traffic slow since the war began last month, with tankers often avoiding the besieged waterway.

According to the International Maritime Organization, ten ships in or near the Strait of Hormuz have been attacked by Tehran in less than two weeks into the war.

Oil tankers traveling through the strait “should be very careful,” a spokesman for Iran’s Ministry of Foreign Affairs told CNBC’s Dan Murphy on Monday.

Madani said three of the six tankers captured in satellite imagery leaving Iran since Feb. 28 were carrying the Iranian flag.

With oil prices soaring on fears of supply disruptions, US President Donald Trump told Fox News’ Brian Kilmeade that ships stuck near the passageway should “show some courage” and push through the channel. “There’s nothing to fear, they don’t have a navy, we’ve sunk all their ships,” Trump said.

The Kharg Island terminal, about 15 miles off the coast of mainland Iran, is the country’s primary oil export facility, handling about 90% of its crude exports before tankers travel through the Strait of Hormuz.

Now, Iran has resumed loading tankers at the Jusk oil and gas terminal in the Gulf of Oman, south of the Strait of Hormuz, which could add additional capacity to crude shipments.

According to TankerTrackers, the Iranian ship is loading 2 million barrels of crude oil – just the fifth such load in the past five years.

The renewed activity at Jask signals that Tehran is exploring alternatives to the Strait of Hormuz, although it is uncertain to what extent it will serve as a viable route for transit, So said.

The Jask oil facility – Iran’s only crude export outlet in the Sea of ​​Oman, which completely bypasses the Strait of Hormuz – is rarely used because it appears to be less efficient.

Madani said it can take up to 10 days to load a supertanker, a class of supertanker built for long-haul oil transport. “It has good domestic promotional value, but not much in terms of logistical benefit.” For comparison, it takes about one or two days to load a VLCC at Kharg Island.

While Tehran continues to export to China, shipments of about 1.22 million barrels per day (mbd) are significantly lower than before the war broke out.

Iran exported 2.16 mbd in February, the highest level since July 2018, according to Kpler’s Soe, and all of that was destined for China as Beijing built up reserves to mitigate potential energy supply risks.

In the first two months of the year, Beijing accelerated its efforts to build up its oil stockpile, with crude imports rising 15.8% from a year earlier, customs data showed on Tuesday.

According to Kpler, Iranian crude loadings for the week of February 16 hit a record 3.78 mbp, more than double the previous week’s average of roughly 1.48 mbd.

Over the years, China has built up large crude stockpiles, stockpiling an estimated 1.2 billion barrels as of January, enough to meet 3 to 4 months of demand, according to the Atlantic Council.

And that buildup took on renewed urgency this year as U.S. President Donald Trump targeted Venezuela and Iran, two of Beijing’s most important sources of supply. The US captured Venezuelan leader Nicolás Maduro in a military raid earlier in the year, while Iran’s supreme leader Ayatollah Ali Khamenei was killed in the US-Israeli war against Iran last month.

The Middle East war has shown few signs of abating, with tensions around the Strait of Hormuz high and global energy markets on edge.

Oil prices rose to around $120 a barrel on Monday, levels not seen in four years, after several oil-producing countries in the Persian Gulf began curbing production and traffic through the Strait of Hormuz was effectively shut down.

Global leaders are scrambling to stem the fallout from a potential oil shock, with the Group of Seven leaders, including the US, considering the largest-ever release of oil reserves and Trump reportedly signaling the war could end soon.

Oil prices have pulled back with the US WTI Crude oil for April delivery eased to around $84.9 a barrel as of 10:50 pm ET on Tuesday and the global benchmark Brent $88.9 per barrel with May delivery.

— CNBC’s Evelyn Cheng, Sam Meredith contributed to this report.