China stocks Iranian oil, highest imports volume in a decade

By Al Mayadeen English
Source: Agencies
16 Aug 2023 15:03
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Iran's oil exports to China rise as global market prices soar compared to discounted Iranian crude.

Iranian oil flag flutters in front of an Iranian sea oil rig (AFP)

China's imports of Iranian oil surpassed their highest levels in a decade as Iran's discounted crude is proving very competitive against global market prices, Kpler data institution said in a report.

As Tehran develops a stronger presence in the region and deepens relations with surrounding countries, which has directly helped the Western-sanctioned country bypass a good chunk of the enforced embargo, its oil exports have been on a steady rise in the past few years, most of which going to China.

According to the intelligence firm, Iran will provide the Asian giant with around 1.5 million barrels per day through August, compared to an average of 917,000 bpd in the first seven months of 2023. This volume is the highest recorded since 2013.

“The higher flat prices go, the better risk-reward ratio for Shandong [Independent Chinese] refiners to look for Iranian crude,” said Homayoun Falakshahi, a senior oil analyst at Kpler.

On the other hand, another company that keeps track of oil flows into China said that Iran is exporting to the world's largest energy consumer around 1 million bpd this month, compared with a record 1.3 million barrels in December 2022. But different methods to analyze oil inputs could be behind the contrasting estimates.

“Crude import quotas and uncertainty on non-crude import standards are holding China’s imports in August in check,” said Emma Li, an analyst at Vortexa Ltd, adding that increasing oil flows could be directly heading into storage facilities.