As the conflict with Iran widens, global shipping costs are surging.
Supertanker costs in the Middle East have reached record highs, prompting both the US and China to call for the safeguarding of vessels in the Strait of Hormuz.
The strait is the narrow channel off the coast of Iran that carries 20% of global oil consumption as well as massive quantities of liquefied natural gas (LNG). Iran has vowed to attack any ship that tries to pass through the strait. Vessels in the area have also been hit by strikes.
Shipping through the strait has almost completely stopped. Ship-tracking data from the MarineTraffic platform reveals a virtually empty Strait of Hormuz.
Fears of a prolonged closure have caused oil and natural gas prices to jump, and world powers want to stabilize the markets.
On Tuesday, China’s Ministry of Foreign Affairs spokesperson Mao Ning said: “China urges all parties to stop the military operations at once, avoid further escalation, keep the shipping routes in the Strait of Hormuz safe, and prevent further impact on the global economy.”
US President Donald Trump went further, offering shipping insurance and guarantees. On Truth Social, he declared: “No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD.”
Trump also said the US Navy would escort oil tankers in the Gulf.
The details are unclear, but China may have the most to gain. China is the world’s largest importer of crude and the world’s biggest buyer of Iranian oil.
It’s a point not lost on Trump’s political foes. On his X account, Democratic lawmaker Joaquin Castro points out: “This certainly looks like the United States will be subsidizing and protecting oil shipments to China.”
And it’s not just China. Asia sources a whopping 60% of its oil from the Middle East.
China and Japan are also the world’s largest importers of LNG.
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