China seeks safe passage for tankers as Strait of Hormuz traffic collapses

China has begun direct discussions with Iran aimed at securing safe passage for crude oil tankers and vessels carrying liquefied natural gas from Qatar through the Strait of Hormuz, according to three unnamed diplomatic sources, cited by Reuters.

The talks come as the conflict involving the US, Israel and Iran enters its sixth day and maritime traffic through the strategic waterway has been severely disrupted. The Strait of Hormuz — a critical route for roughly one-fifth of global oil and liquefied natural gas supplies — is effectively closed to most commercial shipping.

Data cited by the sources indicate that crude tanker movements through the strait have dropped sharply. The average number of daily tanker transits has fallen from about 24 to just four on March 1. At the same time, roughly 300 tankers are currently stuck inside the strait with no clear route out, while additional vessels are unable to enter the area to load cargo once those ships depart.

The disruption has pushed oil prices significantly higher, with crude rising by more than 15% since the crisis began. Analysts warn that the market outlook could become even more bullish if the waterway remains closed for an extended period.

China has a strong incentive to restore shipping flows because it receives around 45% of its oil imports through the Strait of Hormuz. One notable development reported overnight involved a vessel named Iron Maiden, which changed its tracking signal to indicate “China-owner” status before successfully transiting the strait. According to reports, only ships owned by Chinese or Iranian entities are currently being allowed to pass.

The situation has raised a key question for global energy markets: whether China’s negotiations could lead to a broader framework that allows international shipping to resume, or whether Beijing is simply securing a limited corridor for its own vessels while most other ships remain blocked. If the latter proves true, analysts say the arrangement would likely do little to ease pressure on global oil benchmarks.

Despite the ongoing disruption, there were some tentative signs of easing pressure in energy markets. U.S. crude futures (WTI) fell by $1.57 to $79.40.

Earlier, US Treasury Secretary Scott Bessent announced a temporary policy measure aimed at stabilising global oil supply. In a statement, he said the Treasury Department would issue a 30-day waiver allowing Indian refiners to purchase Russian oil that is currently stranded at sea.

“To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver to allow Indian refiners to purchase Russian oil. This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorises transactions involving oil already stranded at sea. India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil. This stop-gap measure will alleviate pressure caused by Iran’s attempt to take global energy hostage.”

Meanwhile, US President Donald Trump publicly downplayed the recent rise in oil prices. However, analysts note that rising gasoline prices have historically been a key concern for his administration, leaving open the question of how long Washington would tolerate higher crude prices. Some observers suggest that prices near or above $80 per barrel for WTI could become a sensitive threshold.

By Tamilla Hasanova