Fortune reported that ships claiming Chinese or 'Muslim' ownership are receiving de facto IRGC protection from interdiction in the strait of Hormuz, while vessels without those affiliations face warning shots, drone strikes, or seizure. The IRGC named and struck the Marshall Islands-flagged tanker Louise P on the stated grounds that 'it belongs to the US'; it struck the tanker Prima after the vessel ignored transit warnings. Both attacks were publicly claimed, with victims identified by name. Ships flying the right flags pass unmolested.
The two-tier system did not emerge overnight. Reuters reported earlier that China had entered direct formal negotiations with Tehran for guaranteed passage — an evolution from the ad hoc AIS flag-switching that Chinese-linked tankers began using in the war's first days. Iran's Foreign Ministry escalated further on Day 10, warning all tankers passing through Hormuz 'must be very careful' while the situation remains insecure — the first time the threat moved from IRGC operational channels to formal diplomatic messaging. The statement placed every shipowner on notice: protection is available, but it runs through Tehran and Beijing.
The commercial consequences are already measurable. Tanker traffic through Hormuz is down approximately 70%. Kuwait declared Force majeure on all oil exports, removing a further 300,000 barrels per day. VLCC freight rates hit an all-time high of $423,736 per day — and that figure reflects the cost for vessels willing to transit at all. For those that cannot claim Chinese or Muslim affiliation, the strait is functionally closed. Saudi, Kuwaiti, and Iraqi crude has no alternative export route at comparable volume; the East-West Pipeline (Petroline) across Saudi Arabia carries a maximum of roughly 5 million barrels per day, well below the 17-21 million barrels that normally transit Hormuz.
The partition of Hormuz gives Beijing structural leverage that outlasts the war. China imported approximately 11 million barrels per day in 2025, over half of it from Gulf producers. If Chinese-affiliated vessels are the only ones moving freely through the strait, Beijing becomes the de facto gatekeeper of Gulf oil access — not through military control, but through a bilateral arrangement with Iran that no other power can replicate. European and Japanese refiners, already facing spot prices that swung $30 in a single session on Day 10, confront not just a price shock but a supply architecture that preferences a competitor. the strait is no longer simply open or closed. It is open for Chinese-linked commerce and closed to everyone else, enforced by Iranian interdiction and backed by Chinese naval presence.
