AGL 5.72 Increased By ▲ 0.02 (0.35%)
ANL 8.93 Decreased By ▼ -0.17 (-1.87%)
AVN 79.42 Increased By ▲ 0.26 (0.33%)
BOP 5.18 Decreased By ▼ -0.03 (-0.58%)
CNERGY 4.69 Decreased By ▼ -0.04 (-0.85%)
EFERT 81.32 Increased By ▲ 0.21 (0.26%)
EPCL 50.91 Increased By ▲ 0.16 (0.32%)
FCCL 13.45 Decreased By ▼ -0.07 (-0.52%)
FFL 5.80 Increased By ▲ 0.04 (0.69%)
FLYNG 7.18 Decreased By ▼ -0.11 (-1.51%)
FNEL 4.80 Decreased By ▼ -0.04 (-0.83%)
GGGL 8.72 Decreased By ▼ -0.17 (-1.91%)
GGL 15.73 Decreased By ▼ -0.07 (-0.44%)
HUMNL 5.84 Increased By ▲ 0.01 (0.17%)
KEL 2.58 Decreased By ▼ -0.01 (-0.39%)
LOTCHEM 29.31 Decreased By ▼ -0.49 (-1.64%)
MLCF 25.37 Increased By ▲ 0.22 (0.87%)
OGDC 72.56 Decreased By ▼ -0.14 (-0.19%)
PAEL 15.39 Decreased By ▼ -0.08 (-0.52%)
PIBTL 5.17 Increased By ▲ 0.04 (0.78%)
PRL 16.27 Decreased By ▼ -0.23 (-1.39%)
SILK 1.05 Decreased By ▼ -0.05 (-4.55%)
TELE 9.34 Decreased By ▼ -0.21 (-2.2%)
TPL 7.35 Increased By ▲ 0.02 (0.27%)
TPLP 19.10 Decreased By ▼ -0.16 (-0.83%)
TREET 21.89 Increased By ▲ 0.05 (0.23%)
TRG 142.76 Decreased By ▼ -1.34 (-0.93%)
UNITY 17.20 Decreased By ▼ -0.32 (-1.83%)
WAVES 10.05 Increased By ▲ 0.05 (0.5%)
WTL 1.36 Decreased By ▼ -0.01 (-0.73%)
BR100 4,248 Decreased By -10.3 (-0.24%)
BR30 15,761 Decreased By -79.9 (-0.5%)
KSE100 42,349 Decreased By -25 (-0.06%)
KSE30 15,632 Decreased By -33.3 (-0.21%)
Follow us

SINGAPORE/LONDON: China’s Iranian oil imports in April came off peak volumes seen in late 2021 and early 2022 as demand from independent refiners weakened after COVID-19 lockdowns pummelled fuel margins and on growing imports of lower-priced Russian oil.

The easing of Iranian oil purchases, which still make up some 7% of imports by the world’s largest crude importer, came as Western diplomats have largely lost hope in reviving a 2015 nuclear pact while high oil prices emboldened Iran to take its time to return to an agreement.

A revived nuclear deal would allow Iran to boost its oil sales beyond China - Iran’s number one customer for the past two years - to previous clients in South Korea and Europe.

Meanwhile, Russian crude, displaced by falling demand in Europe on growing concerns about sanctions over Russia’s invasion of Ukraine, is heading to China. Russia sent tens of thousands of troops into Ukraine on Feb. 24 in what it called a “special operation”.

Initial assessments by Vortexa Analytics showed China imported nearly 650,000 barrels per day of Iranian crude in April, slightly less than the nearly 700,000 bpd discharged in March.

Kpler, another data analytics firm, tentatively pegged Iran’s April exports at 575,000 bpd, down from an average of 840,000 bpd in the first quarter of 2022, though the agency expected to revise up April volumes in coming weeks.

China’s independent refiners, also known as teapots and situated mostly in the eastern province of Shandong, are key Iranian oil buyers. The refiners have since February reduced crude imports, operating under half their capacity in April as soaring prices, tighter import quotas and COVID lockdowns squashed margins, traders said.

“The Iranian barrels started having difficulties finding buyers since February, after independent plants cut throughput,” said Emma Li, China analyst with Vortexa.

At least six cargoes of Iranian oil totalling eight million barrels have not been able to offload at Chinese ports, floating off Shandong and Zhejiang ports for more than three months, Li added.

In contrast, China’s sea-borne crude imports from Russia jumped 16% in April from March to about 860,000 bpd, the highest since last December, Refinitiv data showed.

Though the April Russian supplies were dominated by its Far East export grade ESPO blend, the prospect of growing Urals cargoes being forced out of Europe is providing a new lure for the teapots.

At least one teapot refiner bought one June-arriving Urals cargo at a discount of $6 to $7 a barrel to Brent on delivered basis, traders said.

That compared with Iranian oil, transacted at $5 a barrel under Brent.

“Teapots are facing terrible margins and plentiful oil on offer. Dealing Iranian and Russian barrels both carries risks, so refiners would be careful and picking the cheaper supplies that offer relatively better margins,” said a trading executive with a Shandong-based refiner.

To avoid US sanctions, Iranian crude has been exported to China marked as oil from Oman, the United Arab Emirates and Malaysia, traders have said.

Aware of the Chinese purchases, US President Joe Biden’s administration has chosen not to enforce the sanctions against Chinese individuals and companies.

China’s foreign ministry did not respond to request for comment. Iran’s oil ministry also did not respond to a request for comment.

Chinese customs data last reported imports of 260,000 tonnes (1.9 million barrels) of Iranian oil each in December and January, in its first official record in a year.


Comments are closed.

China’s Iranian oil imports ease on poor margins, lure of Russian oil

Ban on GMO soyabean: govt, importers take divergent positions

Finance Bill 2023: SEZs: FBR to withdraw turnover tax exemption

Country has ‘sufficient’ wheat, cabinet told

Rates of kerosene oil, light diesel dip

FCA for Oct 2022: Nepra to allow KE negative adjustment of Rs2.15/unit

Encashment of SBLC: Resolve Hubco-CPHGC dispute, PM asks authorities concerned

Delay in import of spare parts: Haveli Bahadur Shah power plant faces closure

Media campaigns: ECC approves Rs2bn TSG against Rs5bn demand

Four killed as suicide bomber attacks police guarding polio vaccination team

East Timor opens new port in largest ever foreign investment