China’s largest oil shippers abandon Hormuz, Bab al-Mandab as Middle East conflict deepens

Two of China’s largest state-owned oil shipping companies have halted all tanker traffic through the Strait of Hormuz and the Bab al-Mandab strait, according to a Reuters report on Tuesday, citing industry executives, vessel trackers and a ship broker.

The decision by COSCO Shipping Energy Transportation and China Merchants Energy Shipping (CMES) marks one of the clearest signals yet that the prolonged conflict surrounding Iran has rendered two of the world’s most vital energy corridors too dangerous for even Beijing’s biggest commercial fleets.

The two companies together control more than 100 very large crude carriers, each capable of hauling roughly two million barrels of oil.

Before the outbreak of hostilities between the United States, Israel and Iran in late February, they carried approximately half of China’s crude imports from the Middle East, excluding sanctioned Iranian volumes.

Instead of risking the chokepoints, the companies are now loading oil through ship-to-ship transfers at safer locations outside the Arabian Gulf.

The shift followed direct communications with Chinese central authorities, Reuters reported.

CMES had already informed investors in late July that its vessels would stay out of the Strait of Hormuz “for a long time.”

The Strait of Hormuz, a narrow waterway between Iran and Oman, normally handles nearly one-fifth of the world’s seaborne oil.

The Bab al-Mandab, at the southern entrance to the Red Sea, is the gateway for shipments heading toward the Suez Canal and Europe.

Both waterways have faced severe disruption since the start of the Iran conflict. Hormuz has remained heavily restricted for months.

In mid-July, Yemen’s Houthi movement, aligned with Iran, declared a maritime embargo targeting Saudi-linked shipping, further constricting traffic through Bab al-Mandab.

China, the world’s largest oil importer, has so far managed to maintain supplies by adapting logistics rather than confronting the risks directly.

The move by COSCO and CMES underscores a growing preference among major Asian operators for longer, more expensive but lower-risk alternatives.

The US Energy Information Administration (EIA) map of the region highlights the two affected chokepoints: the Strait of Hormuz at the entrance to the Gulf and Bab al-Mandab at the mouth of the Red Sea, with the Suez-Mediterranean (SUMED) pipeline shown as a partial land-based alternative for oil moving toward the Mediterranean.

The decision comes as other workarounds proliferate — including increased use of Saudi Arabia’s Red Sea export terminals, Oman’s Duqm as a transshipment hub, and even China’s newly launched seasonal “Ice Silk Road” container service through Russia’s Northern Sea Route.

Together, these developments point to a broader reconfiguration of global energy trade routes that once seemed fixed.

Analysts say the withdrawal of Chinese state-owned shippers from key Middle Eastern chokepoints and rerouting cargoes are already increasing voyage distances and freight costs.

Reuters reported that rates for tankers carrying oil from Oman to China had risen to about $140,000 a day, roughly four times their earlier level, while alternative routes such as ship-to-ship transfers outside the Gulf add logistical complexity.

For Beijing, the priority appears increasingly clear: protect its shipping fleet while keeping crude supplies moving.

The strategy includes avoiding the Strait of Hormuz and Bab al-Mandab, shifting some cargo handling outside the Gulf and using alternative routes — measures that can preserve supplies but cannot fully replace the capacity and efficiency of normal maritime routes.

The broader energy market is already feeling the pressure.

OilPrice.com data shows Brent crude rose for a fourth consecutive day to $91.28/barrel amid growing uncertainty over exports via Hormuz, even as freight rates and refining margins have surged as markets increasingly price in a prolonged disruption.

Chinese shipping company Sea Legend has launched what is being described as the first regular commercial container service along Russia’s Northern Sea Route (NSR), branding the China-Europe service the “Ice Silk Road.”

The weekly service links Ningbo-Zhoushan in eastern China with Felixstowe in the UK, using the Arctic passage along Russia’s northern coast. Sea Legend says the voyage can take as little as 18 days, compared with more than 40 days through the Suez Canal, The Guardian reported.

On August 15–16, 2026, the 1,740-TEU containership Dubai Tower departed Ningbo-Zhoushan Port in eastern China.

It is sailing almost entirely along Russia’s Arctic coastline before reaching northern European ports (Felixstowe in the UK, Rotterdam, Hamburg, and Gdynia in Poland).

The service is seasonal (mainly July–October, while ice conditions allow) and currently uses small-to-medium ice-strengthened ships. At least eight voyages are planned this summer.

Cargo is mostly high-value, time-sensitive, and temperature-controlled goods: energy-storage systems, lithium batteries, solar modules, and new-energy vehicle components, as per Hong Kong-based South China Morning Post.

Russia’s state nuclear company Rosatom controls Arctic navigation permits and provides nuclear-powered icebreakers when needed.