Iran’s Strait of Hormuz closure slashes oil trade with China

Iran’s recent actions to close the Strait of Hormuz have significantly impacted its own trade with China, according to newly released Chinese customs data. The data indicates a severe decline in Iran’s non-oil trade with China and a sharp reduction in oil shipments, which have dropped from 1.74 million barrels per day in April to approximately 550,000 in early July. This situation appears to have had a less detrimental effect on China’s trade with other Persian Gulf nations, with Beijing continuing to maintain commerce in the region. The closure of this vital maritime chokepoint, a critical artery for global oil supplies, reflects heightened tensions in the ongoing Iran-U.S.-Israel conflict and raises questions about future trade and shipping dynamics. Key Takeaways Newly released Chinese customs data suggests Iran’s trade with China has suffered significantly due to the closure of the Strait of Hormuz. The market pricing appears consistent with a scenario where the strait remains closed, as evidenced by a 12.5% likelihood of normalization by August 31. The continued closure of the Strait of Hormuz is consistent with increased geopolitical tensions affecting regional trade and ener...