US blockade cuts Iranian oil to China

The United States re-imposed a blockade on Iran's shipping and ports on July 13, 2026, after a deal to halt the war between them broke down. The blockade aims to cut off Iran's oil sales, its primary source of hard currency, compounding earlier losses from wartime strikes on its energy infrastructure. As a result, offers of Iranian crude to Chinese buyers have declined and prices have jumped. Trade sources report that offers for September and October delivery have fallen, with some Iranian crude now being offered at premiums to Brent Crude futures, a sharp reversal from earlier discounts. Iran's oil exports have fallen since mid-July, with no visible crossings of the Strait of Hormuz by supertankers carrying Iranian crude, according to Kpler data. Floating storage outside the blockade zone has dropped to about 80 million barrels from 105 million barrels. Chinese independent refiners, known as teapots, particularly in China — Shandong province, are the top buyers of sanctioned oil and face supply uncertainty. Some are turning to Brazilian and Iraqi crude as alternatives. U.S. Treasury Secretary Scott Bessent has threatened Iran with 'the toughest sanctions in history,' with details to come, putting Chinese refiners on alert for further sanctions targeting specific buyers. China, which buys over 80% of Iran's shipped oil, has rejected unilateral sanctions. The blockade and sanctions are expected to tighten global oil supply and increase prices, impacting refiners and oil markets.