Oil & Energy
Hormuz Blockade Cuts Iranian Crude Flows, Puts China's Supply Buffer at Risk, Vortexa Says
Iranian crude exports have collapsed as the Hormuz blockade disrupts tanker flows, drains China's supply buffer and complicates any recovery, Claire Jungman, Director of Maritime Risk and Intelligence at Vortexa, said in a Tuesday note.Iran's crude loadings fell to about 210,000 barrels per day in August from roughly 2 million b/d earlier this year, reaching their lowest level since 2020.The decline marks a shift from Iran's earlier sanctions-driven challenges, as physical restrictions on maritime routes now limit whether the country can move crude to international buyers.Iran previously adapted to sanctions by developing a shadow-fleet network that used opaque ownership structures, Automatic Identification System adjustments, and ship-to-ship transfers to sustain exports.Those measures helped Iranian crude flows recover to about 1.5 million b/d to 2 million b/d during 2024-25, despite continued sanctions and a renewed US maximum-pressure campaign from February 2025.The US campaign targeted vessels, intermediaries, Chinese independent refiners and terminals involved in Iranian oil flows, but physical shipments remained resilient while maritime routes stayed open.The situation changed in 2026 after the US began a naval blockade of Iranian ports on April 13, following the conflict that started Feb. 28 and unsuccessful efforts to end the fighting.The blockade initially allowed some Iranian barrels to move after an easing, but restrictions returned in July and effectively halted Iranian crude exports from mid-July, Vortexa data showed.The few barrels that continue to load in Iran have largely failed to replenish supplies east of Hormuz, making the distinction between crude loadings, exports and delivered barrels increasingly important.Iran's shadow fleet remains in place, but Vortexa said Asian ship-to-ship activity may increasingly reflect redistribution of barrels already outside the Gulf rather than new Iranian supply.China has avoided an immediate supply shock because Iranian crude entered the blockade with substantial volumes already positioned near its main buyers, including barrels stored on tankers in Asia.That floating inventory has allowed Chinese refiners to keep receiving Iranian crude, but the buffer will eventually shrink as buyers consume stocks without regular replenishment from the Gulf.Chinese independent refiners are increasingly seeking Russian and Middle Eastern grades, while West African and South American barrels could gain share if regional supplies cannot cover the missing Iranian crude.The freight impact will depend on replacement distances, with nearby Russian and Middle Eastern supplies limiting ton-mile growth while tighter regional availability could push Chinese buyers toward Atlantic Basin cargoes.The disruption could also create a tanker bottleneck because Iran's export system depends on vessels completing repeated loading, delivery, transfer, and ballast cycles to sustain outbound flows.To encourage foreign shipping, Iran waived its 10% freight surcharge on vessels moving oil, gas and other liquid petroleum products to or from the country on Sept. 10.Even if Hormuz access improves, Iran may need time to rebuild its export cycle, as vessels must return in ballast and reload before the country can sustain higher outbound volumes.Vortexa said traders should watch laden tankers moving through Hormuz, ballast vessels returning toward Iran and floating storage east of Hormuz, while ship-to-ship counts alone offer limited evidence of renewed exports.If the blockade persists, Iranian loadings could remain exceptionally low as Asian floating stocks decline. Any reopening could restart the sanctions-era trade, but a durable recovery will depend on vessels, freight economics and the wider maritime supply chain.