China’s trade with Iran, Gulf states plunges as Strait of Hormuz crisis hits energy flows

Coverage Comparison

The crisis in the Strait of Hormuz has triggered a sharp contraction in China's trade with Iran and Gulf states, according to multiple reports from the South China Morning Post. Chinese customs data released in March showed a dramatic decline in bilateral trade, with imports from Iran falling 48% year-on-year and exports to Iran dropping 90%. Across the broader Middle East, exports to eight Persian Gulf economies, including Saudi Arabia and Qatar, fell by 57%, while imports declined by nearly 33%.

The disruption stems from the effective closure of the Strait of Hormuz, a narrow waterway that handles about 20% of global oil. This curtailed crude flows, contributing to a 25% year-on-year drop in China's oil imports from Gulf countries in March. The data followed Tehran briefly reopening the strait before reversing course within a day, as Washington maintained a naval blockade on Iranian ships and US President Donald Trump warned Iran not to "hold the US hostage."

Key Claims

The most significant multi-source claim is that China's trade with Iran and Gulf countries fell sharply in March, and that China's oil imports from Gulf countries dropped 25% year-on-year. These figures are corroborated by customs data cited across several reports.

More granular statistics, such as the 48% plunge in imports from Iran and the 90% drop in exports, are attributed to single-source reporting and have not yet been independently verified. Similarly, the claim that the Strait of Hormuz was paralyzed for sustained periods is supported by multiple reports, but the broader assertion that the Iran war has delivered a "systemic shock" to the Gulf's security architecture appears in only one analysis.

Perspectives

Impact on China's Trade: The closure of the Strait of Hormuz has driven up transport costs and energy prices, according to a report from the South China Morning Post. China's export growth softened in March, with exports rising 2.5% year-on-year to US$321.03 billion, falling short of the 4% forecast by economists polled by Wind, a financial data provider. Imports, however, grew considerably by 27.8% to US$269.9 billion, surpassing projections and leading to a monthly trade surplus of US$51.1 billion. The rise in imports extended strong momentum from the first two months of the year, supported by domestic demand and commodity purchases.

Strategic and Security Dimensions: A separate analysis in the same outlet highlights the systemic shock to the Gulf's security architecture. Iranian strikes reached deep into Gulf territory, hitting ports, energy terminals, and airports. War-risk insurance premiums and tanker charter rates surged, and benchmark crude prices climbed above US$110 per barrel. Maritime traffic plunged by over 95%, with notable delays in liquefied natural gas cargoes tightening Asian spot markets. The report argues that the crisis exposed the fragility of Gulf economies that have relied on steady investment flows and a presumed US security guarantee, which has been called into question.

China's Role: China has maintained a calculated diplomatic posture, favoring dialogue while avoiding military entanglement, according to the analysis. Beijing's structural ties with Iran remain substantial, with a cooperation framework often cited at around US$400 billion over 25 years, anchored in energy trade, infrastructure, and financial arrangements. China imported 11.6 million barrels of crude per day last year, with a meaningful share linked to discounted Iranian flows. Yuan-denominated transactions have expanded at the margins, though liquidity and sanctions risks constrain scale. Analysts, such as Alfredo Montufar-Helu of Ankura China Advisors, note that the strait is now a permanent geopolitical lever, and even a ceasefire is unlikely to remove the security premium in energy and maritime insurance costs.

Conclusion

The data released by Chinese customs in March paints a clear picture: the conflict in the Strait of Hormuz has had a profound impact on China's trade with Iran and the Gulf, disrupting energy flows and raising costs. While the full extent of the damage remains to be seen, the crisis has underscored the vulnerability of global chokepoints and the shifting dynamics in the region. As China navigates these turbulent waters, its diplomatic posture and economic ties with Iran will likely remain under close scrutiny.