The Strait of Hormuz, typically the primary artery for Iraqi exports, has seen a sharp decline in traffic, with weekly vessel crossings dropping from 118 to 95 by mid-August. Although some tanker operators are resorting to disabling transponders to evade detection, total volume remains well below historical norms. This instability has forced Saudi Arabia to reroute shipments toward the Suez Canal, a path constrained by lower capacity compared to the Bab el-Mandeb route.

To bridge the gap, Chinese majors including Sinopec, PetroChina, and Sinochem have aggressively expanded their spot market activity. Beyond the recent Iraqi acquisition, these companies purchased 2 million barrels of Emirati Upper Zakum crude during an ADNOC tender in late July. By diversifying suppliers, Chinese refiners are effectively insulating their operations from the logistical bottlenecks currently plaguing Middle Eastern energy corridors.