It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Saturday, May 16, 2026
Chinese Tankers Resume Hormuz Transit Under Iran Coordination
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.
China is pushing to restore Persian Gulf energy flows as it remains heavily dependent on Middle Eastern oil imports
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
Baltics Back Hormuz Mission, But Not At Expense Of Russia Deterrence
May 16, 2026 EurActiv By Charles Cohen, Alice Tidey, and Pietro Guastamacchia (EurActiv) — Eastern EU member states are signalling a willingness to contribute to a possible European mission to secure the Strait of Hormuz, while stressing that any deployment must not come at the expense of NATO’s eastern flank.
Robertas Kaunas, Lithuania’s defence minister, told reporters on Wednesday in response to a Euractiv question that Vilnius backed a “360-degree” approach to European security, including participation in a Hormuz mission, but warned allies against losing focus on Moscow.
“This mission is very important for Greece, Italy, other countries, and for Lithuania too,” he said. “But we also must show the rest of Europe that right now the biggest threat comes from the east, from Russia and Belarus.”
Neighbouring Latvia is also prepared to assign capabilities for a Strait of Hormuz mission, Euractivunderstands. It is already contributing staff and funds to Operation Aspides, an EU naval mission created in 2024 to protect shipping in the Red Sea from attacks by Yemen’s Houthi rebels.
The debate comes as Western countries, including European states, scramble to find a solution to reopen navigation in the Strait of Hormuz, a key waterway through which a fifth of the world’s oil and gas passes.
France and the UK have been leading a so-called coalition of the willing, bringing together more than 40 countries that have been working on military plans to secure navigation once hostilities in the Middle East cease.
Kaja Kallas, the EU’s foreign policy chief, is now pushing to expand the mandate of Operation Aspides, arguing it could be the bloc’s contribution to the coalition of the willing.
Speaking on Tuesday following a meeting of EU defence ministers in Brussels, Kallas said Aspides could be extended to Hormuz without changing its mandate, requiring only an updated operational plan. She added that several additional member states had already indicated a readiness to contribute additional ships. Limited naval assets
Greece currently hosts the operational headquarters for Aspides, while France, Italy and Germany were among the first countries to contribute naval assets. Belgium, the Netherlands and Sweden have also provided personnel or support to the operation.
Two EU diplomatic sources told Euractiv that three more EU countries signalled during Tuesday’s meeting that they were prepared to provide assets for Aspides. Capitals had previously discussed reinforcing the mission after a ceasefire, but none had publicly committed additional vessels until now.
Still, officials acknowledge the limits of European naval power and that any expansion of Aspides could result in Baltic Sea patrols and NATO deterrence missions competing for the same ships or capabilities.
One diplomat told Euractiv that naval assets are “in high demand everywhere, including in the Baltic Sea and the Arabian Sea. We can’t take our eyes off the Russian navy either.”
“In terms of burden sharing on Ukraine and on defence, the Nordic and Baltic countries do much more than some bigger European states, which is a problem. Burden sharing is always raised at Foreign Affairs Council, because more is needed,” the source added.
In a joint statement on Wednesday, the Bucharest Nine and Nordic countries highlighted ongoing efforts in northern Europe, praising “Baltic Sentry”, “Eastern Sentry” and “Arctic Sentry” initiatives aimed at strengthening NATO’s regional posture.
Andrius Kubilius, the EU Defence Commissioner, said the conflict involving Iran posed “real threats” to southern and Mediterranean member states, even as Russia’s war against Ukraine continued to dominate the threat perception in Eastern Europe – exposing the EU’s increasingly divergent regional security priorities.
Eastern flank countries, he said on Wednesday, “defend the whole EU against Russian threats”.
“That is why they deserve the solidarity of the whole European Union and they deserve solidarity investment into their defence capabilities and into mitigation of the negative consequences of the ‘frontier status’ to their economic and social development,” he added.
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.
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.
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