COSCO and CMES route oil tankers via Fujairah, Oman to bypass Gulf chokepoints
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Since late July, two Chinese state shippers, COSCO Shipping Energy Transportation and China Merchants Energy Shipping, have stopped sending oil tankers through the Strait of Hormuz and Bab al-Mandeb and are instead loading cargoes at Fujairah and at or near Omani ports. The two companies control more than 100 VLCCs and handled roughly half of China's Middle East crude imports before the Iran war began in late February.
Key Facts
- COSCO Shipping Energy Transportation and China Merchants Energy Shipping have kept their oil tankers out of the Strait of Hormuz and Bab al-Mandeb since late July.
- The two shippers control more than 100 very large crude carriers, each capable of carrying 2 million barrels of oil.
- Before the Iran war began in late February, the two handled roughly half of China's crude imports from the Middle East.
- China's crude imports from the Middle East, excluding oil from U.S.-sanctioned Iran, averaged 4.9 million barrels per day last year.
- CMES told investors in late July that its vessels would not enter the Strait of Hormuz for the time being.
Chokepoint Pullback
COSCO Shipping Energy Transportation and China Merchants Energy Shipping kept their tankers out of the Strait of Hormuz and Bab al-Mandeb from late July. Yemen's Houthis declared a maritime embargo against Saudi Arabia on July 20, while the Strait of Hormuz remains largely closed after a brief U.S.-Iran interim peace deal reached in June fell apart. The decision by the two shippers followed communications with central authorities. CMES told investors in late July that its vessels would not enter the Strait of Hormuz for the time being and added other shippers have avoided Bab al-Mandeb.
Fleet Scale and Oil Flows
The two shippers together control more than 100 very large crude carriers, each capable of carrying 2 million barrels of oil. They handled roughly half of China's crude imports from the Middle East before the Iran war began in late February. Excluding oil from U.S.-sanctioned Iran, China's crude imports from the Middle East averaged 4.9 million barrels per day last year. The two state shippers do not transport Iranian oil due to sanctions. Supertanker utilisation has dropped since the Iran war started, with many vessels diverted to longer routes to the Atlantic and the Americas.
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COSCO and CMES route oil tankers via Fujairah, Oman to bypass Gulf chokepoints
