China’s imports of Iranian oil surge to record 1.75M bpd last month
(MENAFN) China’s imports of Iranian oil have surged to a record 1.75 million barrels per day (bpd) in August, according to data from Kpler reported by oiprice.com. This figure represents a significant increase from the previous peak of 1.66 million bpd recorded in October 2023 and is nearly 50 percent higher than the 1.24 million bpd imported last month. The rise in imports is attributed to notable increases in shipments to the ports of Rizhao and Dalian, which have seen considerable growth month-on-month. Muyu Xu, an analyst at Kpler, explained that the improved refining margins for Chinese independent refiners, known as "teapots," are driving up production and increasing their need for feedstock.
The flows of Iranian oil into Lanqiao/Rizhao and Dalian ports nearly doubled from the previous month, reaching 342,000 bpd and 132,000 bpd, respectively. Iranian crude has become the most cost-effective option for Chinese buyers, surpassing even Russian oil. Traders noted that Iranian Light crude was recently offered at a discount of USD6.00 per barrel to ICE Brent, a significant discount compared to the less than a dollar discount for comparable Russian crude. This pricing advantage has led more independent refiners to seek Iranian oil to boost their profit margins.
In China’s Shandong province, importers were the largest purchasers of Iranian crude, often masking as Malaysian buyers, accounting for over 70 percent of the volume. Overall, eight Chinese regions, including Liaoning and Henan, have imported Iranian oil, marking the highest number of regions since October 2023. This widespread uptake underscores the growing demand for Iranian oil amid its competitive pricing.
Iran has been actively diversifying its oil export markets to mitigate the impact of Western sanctions imposed over its nuclear program. Recent reports indicate that Iran has expanded its oil shipments to new destinations, including Bangladesh and Oman, as part of its strategy to increase its global oil presence. Despite the challenges posed by U.S. sanctions, Iran, which is exempt from OPEC output quotas, continues to focus on maximizing its oil production and exports to bolster its revenue.
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