china
The Collapse of Direct Oil Flow to China
Vessel tracking data indicates an immediate contraction in the volumes of Iranian crude oil leaving the Persian Gulf, decreasing from over 100 million to approximately 0.83 million barrels between the end of July and the beginning of August 2026. This is not a statistical calculation: it is a physically measurable deviation occurring in real-time, with ships altering traditional routes to avoid areas controlled by the US blockade. The operational mechanism is simple: the blockade has made international financial transactions and insurance contracts impractical, forcing operators to resort to alternative routes.
China, which imported approximately 1.8 million barrels per day (bpd) of Iranian crude oil in March 2025—equivalent to 90% of total exports—has seen offers decrease drastically. The decline is not related to a reduction in production: Iran maintains a production capacity of around 3.5 million bpd. The limitation is infrastructural and financial, not technical. Ships departing from the Jask terminal on the Gulf of Oman must now navigate longer routes, with transit times increased by 25-30% compared to normal.
The Logistics Bottleneck: Costs and Alternatives
The key infrastructure is the Jask terminal, which has resumed loading ships after a pause caused by initial bombings. However, access to the Chinese market requires an obligatory passage through routes not controlled by the blockade—often through the Red Sea or the Suez Canal. These routes increase operating costs: a 100,000-ton ship sailing from China to the Persian Gulf with direct cargo takes approximately 28 days; with deviation, the time increases to over 35 days. The additional cost for transportation and insurance averages over $140 per barrel.
Chinese regasification capacity is not sufficient to compensate for the immediate loss: active installations in the port of Zhanjiang have a maximum capacity of 3.2 million tons per year (approximately 50 barrels per day), well below the volumes lost. Furthermore, the Chinese system does not have alternative routes with sufficiently developed infrastructure to handle significant flows from Iran without structural changes.
Who Pays and Who Profits: A Microeconomic Analysis
Chinese refiners, known as “teapots,” have experienced a direct impact. According to market sources, two of the major players —two independent refineries—have already begun searching for alternative suppliers in the Gulf of Mexico and West Africa. This search has increased the average cost of purchasing light crude oil from $72.48/barrel (Brent, February 27) to over $91.62/barrel (July 30), with a price increase of 26.4%. The additional refining cost is estimated at approximately $18 per barrel.
Conversely, alternative suppliers—such as oil companies in Trinidad and Tobago and the Petrobras group in Brazil—have seen an increase in sales volumes. A contract signed between Petrobras and a Chinese company stipulated the shipment of 12 million barrels by the end of the year, with a price fixed at $94 per barrel, above the global market price. The effect is a direct transfer of value from Tehran to Rio de Janeiro and Port of Spain.
Trajectory and Structural Limit
The current trajectory shows an increasing dependence of China on non-Western suppliers. The blockade has accelerated a process that was already underway, but with measurable physical consequences: refineries may have to resort to alternative suppliers as early as next month. China’s ability to store crude oil—approximately 70 million barrels in strategic reserves—allows for temporary coverage, but does not solve the structural problem.
The limit manifests itself over time: each day of delay in reconfiguring energy logistics chains increases operating costs. The critical data point is the reduction from 100 to 83 million barrels, a decrease of 17% in less than three weeks. Monitoring port traffic at Chinese terminals in Dalian and Tianjin—with storage capacities of approximately 25 million barrels each—will provide an early warning for a possible disruption of the flow. If volumes do not recover by September, the Chinese system will have to resort to alternative refineries in India or South Korea.
“Offers of Iranian crude to Chinese buyers have declined and prices have jumped this week as the U.S. blockade has cut Tehran’s shipments.” — Oilprice.com
Photo by JJ Ying on Unsplash
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