The global oil market is undergoing one of its biggest realignments in decades as the ongoing disruption in the Strait of Hormuz continues to reshape global energy trade.
For the first time since 1985, U.S. imports of Saudi Arabian crude fell to zero for an entire month in July, according to preliminary U.S. Energy Information Administration (EIA) data, highlighting how dramatically oil flows have changed during the current Middle East crisis. The decline is particularly striking given that U.S. refiners were importing more than 800,000 barrels of Saudi crude per day as recently as March.
Venezuela Fills the Gap
Rather than relying on alternative Middle Eastern supply routes, U.S. refiners shifted sharply toward Venezuelan crude. American imports from Venezuela climbed to approximately 600,000 barrels per day in July, up from about 100,000 barrels per day at the beginning of the year, after the U.S. Treasury expanded sanctions licenses following the ouster of Nicolás Maduro’s government.
Refiner Phillips 66 reduced the share of Middle Eastern crude processed at its refineries to less than 1%. CEO Mark Lashier said the company replaced part of its foreign supplies by shipping light U.S.-produced crude to its refinery in New Jersey, reducing its reliance on overseas imports.
China Diversifies Toward Russia and Brazil
At the same time, China has reduced imports of Saudi crude while increasing purchases from alternative suppliers, including Russia and Brazil, as refiners adapt to disruptions affecting Gulf shipping routes.
Russia is already China’s largest crude supplier, accounting for roughly 20% of the country’s total oil imports. Much of that oil is delivered through overland infrastructure, including the Eastern Siberia–Pacific Ocean (ESPO) pipeline, allowing shipments to bypass the Strait of Hormuz entirely.
Analysts say Beijing’s strategy reflects both immediate logistical challenges and a broader, years-long effort to diversify energy supplies away from vulnerable maritime chokepoints.
Why the Strait Matters
The Strait of Hormuz, one of the world’s most important energy chokepoints, has faced repeated disruptions since the outbreak of the Iran conflict. Roughly one-fifth of the world’s seaborne oil normally passes through the narrow waterway, making any interruption significant for global energy markets.
Despite the temporary halt in Saudi shipments to the United States, the disruption may not last. According to Kpler data, U.S. imports of Saudi crude are expected to rebound this month to around 300,000 barrels per day, while overall imports of Middle Eastern crude are also forecast to recover as commercial shipping conditions gradually improve.
Oil prices remain highly sensitive to developments in the region. Although prices initially rose on renewed concerns over supply disruptions, they ended the week lower as negotiations continued over reopening commercial shipping through the Strait of Hormuz.
The shifting trade patterns underscore how quickly geopolitical conflicts can reshape global energy markets, forcing both producers and major consumers to diversify supply chains and seek alternative trade routes while uncertainty persists.
Sources: Bloomberg; Reuters; Yahoo Finance; Middle East Monitor; American Petroleum Institute (API); U.S. Energy Information Administration (EIA)