Iranian Oil Buyers and the Strait of Hormuz Chokepoint That Iran Controls

     Iranian oil and gas sales have long been sanctioned by the “West,” but there are several countries that regularly buy Iranian oil, which is discounted due to the sanctions. Thus, these countries basically profit by getting discounts. China buys lots of Iranian oil, which is re-labeled as “Malaysian.” This oil supplies China’s small independent “teapot” refiners. Syria has long been dependent on Iranian oil to power its grid. In 2024, Türkiye began importing small amounts of Iranian oil, mainly for the low price. In UAE ports, Iranian oil cargoes are blended with other oil and re-exported, for a price. Ship-to-ship transfers of Iranian crude are happening in Malaysian waters, much like ship-to-ship transfers of Russian crude have become common. Venezuela’s heavy crude benefits from blending with lighter Iranian crude, which acts as a diluent to make the blend flow better than the heavy crude. Afghanistan gets about a quarter of its crude, including diesel and LPG, from neighboring Iran.

     If the Israeli-Iran conflict gets bogged down, the Iranians may attempt to close the Strait of Hormuz, which will block quite a lot of oil from getting to markets. In 2024, oil flow through the strait averaged 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption. Since there are no real alternative options, closing the Strait would result in large oil price spikes. It could trigger U.S. involvement. EIA also notes that one-fifth of global liquefied natural gas trade also transited the Strait of Hormuz in 2024, primarily from Qatar. Saudi Arabian crude accounts for 38% of the oil moved through the strait, or about 5.5 million barrels per day. EIA estimates that there is “about 2.6 million b/d of capacity from the Saudi and UAE pipelines could be available to bypass the Strait of Hormuz in the event of a supply disruption.” The Bab al-Mandeb Strait in the Red Sea is another chokepoint that has been threatened by the Houthis in Yemen.

     EIA estimates that the vast majority of oil, oil products, and LNG that traverse the Strait of Hormuz are destined for Asia:

“We estimate that 84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets in 2024. China, India, Japan, and South Korea were the top destinations for crude oil moving through the Strait of Hormuz to Asia, accounting for a combined 69% of all Hormuz crude oil and condensate flows in 2024. These markets would likely be most affected by supply disruptions at Hormuz.”

     EIA estimates that about 7% of crude and condensate (about 0.5 million barrels per day) and 2% of oil products imported to the U.S. go through the strait. This is the lowest level in 40 years, as it continues to be replaced by U.S. and Canadian crude.

 

  

 

References:

 

7 Countries Most Reliant on Iranian Oil. Matt Schmitto. Prediction News. June 15, 2025.  7 Countries Most Reliant on Iranian Oil

Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint. Energy Information Administration. June 16, 2025. Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint - U.S. Energy Information Administration (EIA)