Brent crude fell $3.05 to trade near $107.82 a barrel by mid-morning London time on Thursday after shipping data confirmed that the COSCO-registered supertanker Yuan Hua Hu had cleared the Strait of Hormuz overnight with two million barrels of Iraqi crude on board, anchoring off Oman. At least four other China-linked vessels used the same Iran-controlled corridor between Tuesday and Wednesday.
The move pares Brent's gain since the war began on February 28 to roughly $40 a barrel from a pre-conflict starting point in the high-$60s. WTI fell in tandem to $103.50. The forward curve flattened, with December 2026 contracts giving up roughly $4 to trade at a smaller backwardation against prompt.
Energy desks at Vortexa and Kpler said the Chinese flow, while small in absolute terms compared with the strait's pre-war 20 million barrel-per-day throughput, was significant for two reasons. It demonstrates that the Iranian permit corridor functions for at least some vessels, and it sets a precedent that complicates US blockade enforcement against other Asian buyers — chiefly Indian and Korean refiners — that have been waiting on the sidelines.
The US Treasury did not act on the Yuan Hua Hu and OFAC officials have not commented publicly. The Trump administration is privately treating Chinese state shipping as a de facto carve-out, on the basis that interfering would derail the Beijing summit framework.
Refining margins held up: front-month diesel cracks were broadly flat, with the supply-side relief partially offset by ongoing crude-quality dislocations as Iraqi medium-sour, normally Mediterranean-bound, is being diverted east.