Chinese Tankers Resume Hormuz Transit Under Iran Coordination

By ZeroHedge - May 14, 2026

• During Donald Trump’s visit to China, Washington and Beijing agreed that no country should impose tolls or restrictions on shipping through the Strait of Hormuz.

• Iranian state media said around 30 Chinese vessels have been granted safe passage through Hormuz in coordination with Iran’s IRGC naval forces.
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• China is pushing to restore Persian Gulf energy flows as it remains heavily dependent on Middle Eastern oil imports
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During President Trump's ongoing state visit to China, he and President Xi Jinping agreed that the ‌Strait of ‌Hormuz must be open for ‌the free flow of energy. They along with their senior officials have expressed agreement that no country can be allowed to exact shipping tolls in the Strait of Hormuz.

Following this, Thursday saw Iranian state media proclaim that some 30 Chinese vessels are being allowed safe passage by Iran. Bloomberg also reports, "The vessels were allowed to pass the Strait of Hormuz with the coordination of the Iranian authorities and Islamic Revolutionary Guard Corps’ navy, state TV reports, citing an IRGC naval official." While it's as yet unknown or unclear whether the US Navy side of the de facto blockade will also let them pass, Reuters has also reported the following:

Iran ‌has begun allowing some Chinese vessels to transit through the Strait of Hormuz following an understanding over Iranian management protocols for the waterway, the semi-official Fars news agency said on Thursday, citing an informed source.

via Reuters

In particular the move also follows formal requests by China's foreign minister as well as Beijing's ambassador to Iran, with Tehran reportedly agreeing based on safeguarding the two allies' strategic partnership.

Bloomberg cited the IRGC official as saying of the Iranian protocol for passage, "A new era in the Strait of Hormuz has started as many countries of the world and fleets have accepted that the best, quickest and simplest way for transiting this very important waterway is only though coordination with the IRGC’s naval forces."

This was after Wednesday saw the key milestone of a Chinese supertanker carrying 2 million barrels of Iraqi crude having successfully passed through the Strait of Hormuz, after previously being stranded for more than two months.

Also of note is that the Chinese Cosco Shipping tanker did not have to pay tolls. According to The Wall Street Journal:

Lloyd’s List Intelligence data show the Yuan Hua Hu crossed the waterway through the corridor in the north controlled by the Islamic Revolutionary Guard Corps.

Ship trackers said the vessel switched off its transponder while sailing from an anchorage in Dubai towards Larak, then came back online for a couple of hours before going dark again. Ships crossing through Larak pay an average of $2 million each, according to brokers.

The Yuan Hua Hu is the third Chinese state-owned tanker to leave the Gulf since the start of the war.

State Department spokesperson Tommy Pigott emphasized earlier this week that Washington and Beijing "agreed that no country or organization can be allowed to charge tolls to pass through international waterways like the Strait of Hormuz."

China imports the bulk of its energy from the Middle East, and while it has amassed substantial crude oil stockpiles that are helping it weather the worst of the crisis - anecdotally over 1.4 billion barrels - restoring normal flows from the Persian Gulf is important for one of the world’s top energy importers.

By Zerohedge.com

India’s Oil Crisis Deepens as Hormuz Remains Shut

By Tsvetana Paraskova - May 14, 2026India has lost over 40% of its crude oil flows since the Hormuz Strait closed, leaving oil marketing companies bleeding up to ?1,000 crore per day as the government keeps pump prices artificially low to shield consumers.

• The rupee hit a new all-time low this week and foreign investors have pulled more than $20 billion from Indian equities in the first four months of 2026, already surpassing last year’s full-year record outflows.
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• India’s GDP growth is forecast to slow to 6.7% in fiscal 2026/2027 from 7.7% last year, with analysts warning fuel price hikes are likely in Q2 if the Middle East conflict drags on.

India’s economic pains are intensifying every day that the Strait of Hormuz remains closed.

Two and a half months after the Middle East conflict began, one of the highest-performing emerging markets in recent years and the world’s third-largest crude oil importer is scrambling to contain the oil shock that is spreading to consumer prices, foreign exchange reserves, and economic growth.

Since the war began and cut off over 40% of India’s crude oil flows, those that passed through the Strait of Hormuz, one of the highest-flying economies in Asia has seen its oil import bill soar, investors fleeing the capital market, and the local currency plunging to an all-time low against the U.S. dollar.

Analysts have started to raise inflation estimates and reduce forecasts of this year’s economic growth in India, which is beginning to feel the oil supply shock well beyond the actual disruption of deliveries of oil, LNG, and liquefied petroleum gas (LPG), the primary cooking fuel in the world’s most populous country.

Fuel Crunch

While India still has enough supply and reserves of all these fuels for dozens of days, authorities are urging conservation to reduce consumption and the resulting strain on public finances and foreign exchange reserves and rates.

India’s Prime Minister Narendra Modi this weekend urged Indians to curb gasoline and diesel consumption, use public transportation where possible, and car pool as much as possible.

“Measures such these will help the nation conserve energy, save on the energy import bill and overcome the challenges arising out of the serious military conflict involving many energy producing nations,” Oil Minister Hardeep Singh Puri said.

Some LPG tankers have passed through the Strait of Hormuz since the war began, including one that exited the chokepoint for the first time since the U.S. blockade was placed mid-April.

Meanwhile, India is paying higher prices for LPG imports from elsewhere, as well as higher prices for crude oil that doesn’t need to pass through the Strait of Hormuz, pressuring the current account and foreign reserves.

The government, while urging fuel conservation, is avoiding any panic rhetoric. Puri, the oil minister, earlier this week said that India doesn’t have a supply issue and it has 69 days’ worth of crude oil stocks and 45 days of LPG supply.

To address the collapse of LPG supply from the Middle East, India has asked state refiners to maximize the output of the cooking fuel, and redirected LPG supply from industrial users to household consumers.

To shield consumers from high gasoline and diesel prices, India has kept prices at the pump much lower and has cut taxes on gasoline and diesel.

 

Economic Pain

But this policy is hitting local oil marketing companies (OMCs).

“Our energy sector is absorbing the brunt of the impact,” Puri said.

“OMCs are buying crude, gas and LPG at higher cost, but in order to protect consumers, they are selling final products at lower cost leading to massive mounting losses of up to ?1,000 crore per day. However, the OMCs have ensured uninterrupted energy imports and supply,” he added.

This policy may not be sustainable for much longer, and eventually retail fuel prices would have risen if the supply shock from the Middle East persists, analysts say.

“I am assuming that sometime in Q2, rather sooner than later, they will have to hike retail fuel prices because neither the fiscal buffers nor (the) buffers with the OMCs (oil marketing companies) are enough to withstand a prolonged shock,” Dhiraj Nim, an economist at ANZ bank, told Reuters last week.

The energy sector is not the only one suffering from the war-induced oil shock. India’s currency, the rupee, hit a new all-time low against the dollar on Wednesday amid high oil prices and importer demand for hedging.

PM Modi’s call on Indians this weekend also included urging citizens to reduce foreign travel and gold purchases to help conserve foreign currency reserves, which India is splashing for increasingly costly imports because of the higher oil prices.

Due to the higher oil prices, India’s annual inflation accelerated in April from March, although it was below projections. But analysts warn further acceleration is in the cards in the coming months if the Middle East crisis drags on.

If the Strait of Hormuz remains closed for more months, India’s central bank may have to intervene with monetary policy and India may have to eventually raise gasoline and diesel prices, Reserve Bank of India (RBI) Governor Sanjay Malhotra said this week.

Moreover, a massive withdrawal of foreign investors from the local capital markets is also weighing on forex reserves. Foreign investors pulled more than $20 billion out of Indian equities in the first four months of 2026, government data showed this week. These outflows have already topped last year’s record annual withdrawals, as investors have become averse to India and other emerging markets amid the Iran war.

The oil shock that the war has created will weigh on India’s economic growth in the current fiscal year to March 2027. BMI, part of Fitch, expects India’s GDP growth to slow to 6.7% in the 2026/2027 fiscal year, down from 7.7% in 2025/2026, largely due to the oil price shock.

By Tsvetana Paraskova for Oilprice.com