Chinese Iranian oil imports hit record highs, now set to double in March
CHINA is importing large quantities of Iranian oil and is expected to double imports in March from February, reports Bloomberg
24 March 2021 - 19:00
Iranian crude imports will rise to 856,000 barrels a day in March, the most in almost two years and up 129 per cent from February, according to Kevin Wright, a Singapore-based analyst with Kpler.
His estimates include oil that's undergone ship-to-ship transfers in the Middle East or in waters off Singapore, Malaysia and Indonesia to obscure their origin.
Iranian shipments to the province of Shandong, home to a quarter of China's refining capacity, have surged so much this month they're causing congestion at ports and filling up storage tanks, traders and analysts said.
Oil from the Persian Gulf nation is heavily discounted due to the American sanctions that were first imposed in mid-2018. In China, it usually goes for US$3 to $5 barrel less than benchmark Brent crude, according to traders, who say that's prompting some local companies to stock up as global prices rise and economic activity picks up following Chinese New Year.
Most refiners and traders are reluctant to purchase Iranian crude for fear of repercussions that can include being cut off from the American banking system and having cargoes seized. Tehran has used aggressive marketing as it raises revenue to boost an economy reeling from the sanctions.
Relations between Washington and Tehran took a nosedive when former president Donald Trump pulled out of a nuclear accord with Iran. The country's official oil exports have plunged to almost nothing from around 2.5 million barrels a day before the American sanctions. Iran still produces roughly two million barrels a day.
Tensions have remained high since US President Joe Biden came to power. Tehran has said Washington should lift the sanctions before the two sides start talks.
The waiting time for tankers looking to offload in Shandong was estimated at 12 days last week, compared with eight the week before, according to Kpler. Oil inventories at ports in the province climbed to a one-year high last month, data from industry researcher SCI99 showed.
China's imports of crude oil climbed to an average of 11.1 million barrels a day in January and February, up more than 20 per cent from December, according to Bloomberg calculations.
Iran-origin crude purchased by China is sometimes labeled Omani or Middle Eastern oil, or Malaysian Blend. China imported more than 12 million tonnes of crude from Malaysia in 2020 and 2019, around twice as much as in 2017 before the US sanctions were imposed, customs data show.
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