News / Energy

China's independent refiners stocking up on Iran's crude oil despite US sanctions

Friday, 15 September 2023 8:49 AM [ Last Update: Friday, 15 September 2023 9:02 AM ]

Iranian oil workers work at Mansour Abad oil field, northeast of Behbahan County, Khuzestan province, southwestern Iran, on May 8, 2023. (Photo by Shana news agency)

Latest figures show that the demand for Iranian crude is growing in China, the world's biggest oil importer, after the extension of supply cuts by Saudi Arabia and Russia and as Tehran is stepping up its oil output and exports undeterred by US sanctions.

Iran's crude exports of about 1.5 million barrels per day (bpd) stand at their highest in more than four years, with more than 80% shipped to China, data from consultancies FGE and Vortexa explains.

Iman Nasseri, managing director of FGE, noted that imports of Iranian crude by China's independent refiners could rise another 200,000 bpd to 300,000 bpd, from 1.2 million bpd to 1.3 million bpd now, if prices stay low, although volumes could be capped by buyers' risk appetite and payment constraints.

A senior State Department official, speaking on condition of anonymity, told Reuters news agency that the United States continues to enforce the sanctions on Iran's oil and petrochemical industries.

Iran’s oil prices rose by $6 per barrel in August: OPEC data

OPEC figures show Iran’s oil prices were higher than average OPEC and Brent prices in August.

Beijing has long said it opposes Washington's “long-arm” jurisdiction, and has urged that sanctions on Iran be dropped.

Iran is exporting about 2 million bpd of crude oil as well as condensate and products, as Tehran has boosted production to nearly 3.6 million bpd, say people familiar with the matter, or near its maximum of about 4 million bpd.

In China, traders and analysts say, Iranian oil is bought by independent refineries concentrated in the coastal province of Shandong.

According to figures by the Organization of Petroleum Exporting Countries (OPEC), Iran continued to increase its oil production in August to reach a milestone figure of 3 million barrels per day.

OPEC data cited in reports published in local Iranian media on September 13 showed that Iran’s oil output had increased by 143,000 bpd or 5% last month compared to production figures reported in July.

The figures showed that Iran had regained its position as the third largest oil producer in OPEC in August behind Saudi Arabia and Iraq.

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