Two Chinese Supertankers Exit Hormuz with 4m Barrels of Crude
Two Chinese supertankers, the Yuan Gui Yang and Ocean Lily, exited the Strait of Hormuz on Wednesday morning carrying approximately four million barrels of Iraqi crude oil. The exit was the first material commercial movement through the strait since Iran’s newly-established Persian Gulf Strait Authority began formalising its claimed transit authority on Sunday. Brent crude fell to as low as $110.16 a barrel on the news before regaining most of its losses; by the close it had eased further to $105.20, the lowest mark of the post-cancellation period.
The PGSA framework claims that navigation through the designated Strait of Hormuz zone requires “full coordination” with Iran and that 1,500 vessels are currently waiting for Iranian permission to transit. The two Chinese supertankers exiting today are the most concrete demonstration that the formal Iranian framework is not, at present, operationally constraining all flows — though it is unclear what coordination, if any, accompanied this morning’s movements. The Institute for the Study of War yesterday assessed Iran is storing 42 million barrels of crude on aging floating tankers around Kharg Island and Chabahar Port (a 65% jump since the war began per Kpler), with onshore storage at 64% of capacity (Kayrros), leaving only a few weeks of production space. The Indian rupee hit a record low overnight as the US-Iran stalemate continued to stoke global inflation fears.