The wait is over: after the Persian Gulf side of the Hormuz Strait had turned into a bit of a parking lot late last week as tankers piled up hoping to use the ceasefire and make the crossing, two Chinese supertankers loaded with crude sailed through the Strait of Hormuz hours after a Greek vessel moved through the waterway, marking a significant uptick in oil shipping traffic. It represents the biggest day of oil exits through Hormuz since the war caused traffic through the waterway to all but halt six weeks ago. More importantly, none of the ships are carrying Iranian oil or have obvious, direct links to the country.
The two Chinese supertankers are the Cospearl Lake and the He Rong Hai. The Greek one is the Serifos. The Serifos and the He Rong Hai loaded their cargoes in Saudi Arabia, while the Cospearl Lake did so in Iraq, the tracking data show.
All three tankers sailed eastward via south of Iran’s Larak Island, a new route outlined by Iran’s navy last week. The duo were in the Gulf of Oman by Saturday morning, ship-tracking data shows.
The two Chinese supertankers are the first from the Asian nation observed taking barrels out of Persian Gulf, a benefit for Beijing but also underscoring that the country has also been squeezed by the conflict. There’s also a third Chinese tanker, the Yuan Hua Hu, which hasn’t been signaling on Saturday, that had been waiting close by the first two before they moved to depart the Persian Gulf.
The ships’ journeys were widely watched by marine and oil industry analysts as a sign of potential uptick for the traffic through the strait. Only two bulk carriers were allowed to pass on Friday, the fewest so far in April, according S&P Global Market Intelligence.
While the exits are significant, in oil flow terms, they are still way below peace-time levels: The three crossing tankers between them have a transport capacity of about 6 million barrels of crude. In addition, Iran, the only country really sending barrels through, exported at a rate of about 1.7 million barrels a day last month. That would imply roughly half the normal rate of shipments through the waterway — and only on a single day.
Iran has said that vessels are allowed to sail through the waterway, but that they must get permission to do so. All three tankers followed a northerly route through the strait that has been demanded by Tehran. That path passes through Iranian waters and along the coasts of Qeshm and Larak Islands and is well away from the traditional Hormuz shipping lanes that hug the southern coast of the waterway.
The Greek tanker was signaling for Malacca in Malaysia, whose media reported on Friday a permission for the country’s freighters to depart. Malacca is also a waypoint for ships going elsewhere in Asia.
Almost all traffic through the waterway, which normally handles about a fifth of the world’s oil and a similar portion of liquefied natural gas, ground to a halt within a day of the war starting on Feb. 28.
The reopening of Hormuz is critical to global oil trade because its closure has resulted in the loss of millions of barrels of supply to mostly Asian markets. A resumption would alleviate pressure on increasingly tight physical markets everywhere, and send prices plunging. The US and Iran are set to hold peace talks in Islamabad in the coming days.