Chinese State Carriers Pull VLCCs from Hormuz and Bab al-Mandeb Routes

Chinese state-run shipping groups COSCO and CMES have reportedly abandoned attempts to navigate their VLCCs through the Strait of Hormuz and the Bab el-Mandeb Strait after security consultations with the Chinese central government. CMES was the first to cease Hormuz operations in late July, though no formal announcement has been made, while its stance on Bab el-Mandeb remains unclear. Together the firms control over a hundred VLCCs with a combined capacity exceeding 200 million barrels of oil, and they are now taking significantly longer routes, a development that frustrates oil-importing refineries.

An alternative strategy gaining traction involves ship-to-ship transfers in the Gulf of Oman, outside Iran’s attack range, a practice that has yielded “low risk and good profits” according to a Chinese shipping executive. Saudi Aramco has started loading tankers at Hormuz ports and offering similar transfers near Fujairah, indicating confidence in moving oil despite the threats. Tracking data shows several COSCO and CMES vessels already used this method in July, with a dozen more slated for mid-September.