Two large Chinese supertankers, the Singaporean-flagged VLCC Xin Long Yang and the Chinese-flagged VLCC Cosnew Lake, successfully exited the Red Sea via the Bab el-Mandeb strait. These vessels, chartered by Unipec (the trading arm of Chinese refiner Sinopec) and carrying a combined 4 million barrels of Saudi Arabian crude oil loaded at Saudi Arabia's port of Yanbu, appear to have navigated around a blockade enforced by Iran-aligned Houthi militias. The Xin Long Yang is reportedly headed for Qinzhou, while the Cosnew Lake is destined for Huizhou, both in southern China. This movement came after the Xin Long Yang had initially made a U-turn and paused in the Red Sea, resuming its journey southward, followed by the Cosnew Lake, and both exited later on Thursday.
This development is significant given the ongoing Middle East conflict, which has severely disrupted shipping traffic through key chokepoints. Houthi attacks in the Red Sea have led to nine tankers turning back, and oil flows through the Bab al-Mandeb strait, which averaged 9.3 million barrels per day (bpd) in 2023, fell to about 4.1 million bpd in 2024. While the Strait of Hormuz has effectively shut since February, reducing oil flows from 20.7 million bpd to 14.6 million bpd, the successful passage of these Chinese tankers suggests a potential exemption from the blockade for Chinese vessels, especially those ferrying Saudi oil. Al Jazeera noted that Chinese-owned tankers carrying Saudi crude from Yanbu had previously passed through the Bab el-Mandeb chokepoint without interdiction, despite warnings to Western- and Saudi-linked operators.
The global oil market has reacted sharply to the regional tensions. Brent futures rose by $6.58, or 6.96%, to $100.65 a barrel, exceeding $100 for the first time since late May, according to Al Jazeera. The continued closure of the Strait of Hormuz and Houthi threats in the Red Sea have sent prices soaring, impacting consumers with an average U.S. gasoline price reaching $4.09 per gallon. The ability of certain tankers, particularly those with Chinese crew and destination carrying Saudi oil, to navigate these troubled waters could offer some clarity on the crude market's future trends, even as the broader supply chain remains under severe pressure.
