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Kuwait Times
29-06-2025
- Business
- Kuwait Times
China's Iran oil imports surge on rising shipments, teapot demand
China's Iran oil imports surge on rising shipments, teapot demand Beijing imported over 1.8m bpd from Iran for June 1-20 SINGAPORE/LONDON: China's oil imports from Iran surged in June as shipments accelerated before the recent conflict between Zionist entity and Iran and demand from independent refineries improved, analysts said. The world's top oil importer and biggest buyer of Iranian crude brought in more than 1.8 million barrels per day from June 1-20, according to ship-tracker Vortexa, a record high based on the firm's data. Kpler's data put the month-to-date average of China's Iranian oil and condensate imports at 1.46 million bpd as of June 27, up from one million bpd in May. The rising imports were fuelled in part by an increase in available supplies from floating storage after export loadings from Iran reached a multi-year high of 1.83 million bpd in May, Kpler data showed. It typically takes at least one month for Iranian oil to reach Chinese ports. Robust loadings in May and early June mean China's imports from Iran are poised to remain elevated, Kpler and Vortexa analysts said. Independent Chinese 'teapot' refineries, the main buyers of Iranian oil, also showed strong demand as their stockpiles depleted, said Xu Muyu, Kpler's senior analyst. A possible relaxation of US sanctions on Iranian oil could further bolster Chinese buying, she added. US President Donald Trump said on Wednesday that Washington had not given up its maximum pressure campaign on Iran - including restrictions on Iranian oil sales - but signaled a potential easing in enforcement to help the country rebuild. For this week, Iranian Light crude oil was being traded at around $2 a barrel below ICE Brent for end-July to early-August deliveries, two traders familiar with the matter said, compared to discounts of $3.30-$3.50 a barrel previously for July deliveries. Narrower discounts were spurred by worries that oil flows could be disrupted through the Strait of Hormuz, a critical waterway between Iran and Oman, traders said. Market fears for a closure of the choke-point escalated after last weekend's US attack on Iranian nuclear sites but eased after Iran and Zionist entity on Tuesday accepted a ceasefire. Tighter discounts for Iranian oil come amid a retreat in futures prices. ICE Brent crude futures hovered at $68 per barrel on Friday, their level before the Zionist-Iran conflict began and down 19 percent from Monday's five-month peak. Iran's overall crude exports likely slowed in the second half of June amid the Zionist entity and US airstrikes, Kpler, Vortexa and a third vessel tracking firm told Reuters. Iran's total crude shipments have slowed to a monthly average of 1.5 million bpd so far in June, according to Kpler, down from a five-week high of 2.2 million bpd in the week starting June 16. Vessel tracking firm Petro-Logistics also estimated that shipments dropped in the second half of June after a strong start to the month. 'Crude exports in the first half of the month were at multi-year highs as Iran rushed to export cargoes following the Zionist entity attacks of June 13,' Daniel Gerber of Petro-Logistics told Reuters. 'While there appears to have been a slowdown since then, we assess that crude loadings have continued largely uninterrupted.' A big drop in exports from Iran, OPEC's third-largest producer, would tighten global supplies and likely support oil prices. — Reuters
CNBC
27-06-2025
- Business
- CNBC
China skirts U.S. sanctions as top buyer of Iranian oil — here's how, and why that's unlikely to change soon
For years, China has been buying discounted Iranian oil in bulk, and the U.S. sanctions on Tehran have barely put a dent in that trade, analysts said, thanks to a shadow supply chain of transshipment and a yuan-denominated payment system that bypasses the U.S. dollar. Chinese customs have not shown any oil shipped from Iran since July 2022. Ship tracking data from analytics firm Kpler, however, indicated China's Iranian crude imports have continued to rise since then, nearly doubling to 17.8 million barrels per day (mbd) in 2024 from the 2022 level. In the first five months of this year, those imports have remained at an elevated level of 6.8 mbd, little changed from the same period in 2024. China is still the largest consumer of Iranian crude by far. The U.S. Energy Information Administration suggested in a report in May that nearly 90% of Iran's crude oil and condensate exports continued to flow to China. Iran has faced some of the broadest sanctions the U.S. has imposed on any country as Washington sought to choke the regime's main source of revenue that was used to fund its nuclear program and militias such as Hamas and Hezbollah. The Trump administration has been actively imposing fresh sanctions on tankers involved in facilitating Iranian crude to China. Nonetheless, that has put a little dent on Iranian oil exports, said Brian Leisen, global energy strategist at RBC Capital Markets, who added that "the physical market has not seen any long-term impact to the flow of Iranian oil since the [Trump] administration took office." Iranian petroleum and petrochemical sales were estimated to have generated as much as $70 billion in 2023, according to a U.S. Congress report last year. Foreign oil buyers are drawn to Iranian petroleum exporters because they are often sold at a discount compared to Persian Gulf or price-capped Russian suppliers. Iranian Light oil was traded at about $6 to $7 cheaper than the United Arab Emirates Upper Zakum crude — a non-sanctioned grade and at similar quality as Iran Light — at $64 per barrel, Muyu Xu, senior oil analyst at Kpler told CNBC Thursday. China's independent refineries, known as "teapots," have in recent years been the major buyers of cheap Iranian crude, as big private refiners and state-owned firms still shun the sanctioned crude, multiple industry analysts said. These teapots often purchase Iranian crude on a delivered basis, meaning the sellers would arrange for carriage by sea to the place of delivery, shielding the Chinese buyers from the risk of transportation, Xu noted. While some Iranian cargoes are shipped directly from Iran to China, the majority undergo multiple ship-to-ship transfers, often in the Middle East Gulf or the Strait of Malacca, where Iranian oil transported by sanctioned vessels is transferred to non-sanctioned tankers before shipping to China. "[The] Middle East is a multi-origin oil market and if the cargo gets transported from ship to ship, it is not easy to trace once documents are switched," said Punit Oza, president at the Institute of Chartered Shipbrokers. Tankers loading in Iran would also do what's called "spoofing" — where they broadcast fake tanker route information to mask their involvement in this trade, analysts said. These payments are typically made in renminbi and through small U.S.-sanctioned banks, shielding the buyers from exposure to the U.S.-dollar dominated system, which avoids exposing China's large international banks to the risk of US sanctions. "Because there is no dollar exposure, being excluded from the SWIFT payments systems does not pose a large impediment for oil flows to continue," said Brian. SWIFT is the world's main international payment network, dominated by the greenback. The area to the East of Peninsula Malaysia has seen bustling ship-to-ship activity and is a "hot spot for Iranian oil," where crude oil gets transshipped onto other vessels before ending up in China, said Bridget Diakun, senior risk and compliance analyst at Lloyd's List Intelligence. "I've seen a lot of tankers spoofing their location off Malaysia recently, with these ships taking an additional precaution to hide the ship-to-ship and obfuscate the origin of cargo," Diakun said. As the U.S. continued to intensify sanctions, Iranian oil owners and shipping operators would take additional steps to make the supply chain "more complicated and tracking vessels more confusing" in order to carry on with these trades, Diakun added. China's crude imports from Malaysia increased significantly last year to 1.4 million barrels per day from 1.1 million barrels per day in 2023, which exceeded Malaysia's domestic crude oil production of around 0.6 million, according to EIA. U.S. President Donald Trump earlier this week surprised markets with a post on Truth Social that China can continue to purchase Iranian oil, in an apparent disregard of his earlier policies to squelch Iran's oil exports. U.S. crude oil prices tumbled 6% following his comment. A senior White House official later clarified to CNBC that Trump's comments do not indicate a relaxation of U.S. sanctions. Kpler's Xu saw Trump's remarks as a "calculated trade-off," aimed at encouraging Iran to uphold the ceasefire and re-engage in nuclear talks, while signaling "goodwill" to China ahead of the next round of trade negotiations. "It is now too early to say whether this points to a potential waiver on Iranian sanctions," she said, noting the possibility of Washington slowing the pace of new sanctions — which would further support such purchases by Chinese teapots. While there is still "no clear conclusion for Iran despite ceasefire, for the physical oil market, we expect oil exports to continue as usual," RBC's Brian noted. Speaking at a news conference at the NATO summit this week, Trump said Iran is "going to need money to put that country back into shape," raising hopes that an easing of the "maximum pressure" campaign against Iran could be on the table.
Business Times
09-05-2025
- Business
- Business Times
US sanctions on China refiners over Iran oil disrupt operations: sources
[SINGAPORE] Recent US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as US President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to US$2.30 to US$2.40 a barrel against ICE Brent from about US$2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by US-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90 per cent of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. Shipping, sales headaches The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around Apr 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of petrol blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG ship tracking data showed. That contrasts with the first three months of this year when 83,000 metric tonnes (701,000 barrels) of methyl tertiary butyl ether, a key petrol blendstock export, were shipped from Laizhou, accounting for 15 per cent of China's total outflow of the blendstock. State giant China National Offshore Oil Corporation (Cnooc) stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the US sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. Cnooc did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered. REUTERS
Yahoo
08-05-2025
- Business
- Yahoo
Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say
By Siyi Liu, Trixie Yap and Chen Aizhu SINGAPORE (Reuters) -Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. SHIPPING, SALES HEADACHES The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed. That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock. State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. CNOOC did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
Yahoo
08-05-2025
- Business
- Yahoo
Exclusive-US sanctions on China refiners over Iran oil disrupt operations, sources say
By Siyi Liu, Trixie Yap and Chen Aizhu SINGAPORE (Reuters) -Recent U.S. sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington's stepped-up pressure is inflicting on Tehran's biggest oil buyer. The targeting of independent refiners, known as teapots, marked an escalation in Washington's efforts to cut off Tehran's export revenue as President Donald Trump seeks to pressure Iran into a deal over its nuclear programme. Washington's sanctions against Shandong Shouguang Luqing Petrochemical in March and Shandong Shengxing Chemical in April have also begun to deter other, larger independent Chinese refiners from buying Iranian crude, three of the sources said. About five plants in the refining hub of Shandong province have halted purchases of Iranian oil since last month, worried about being hit by sanctions, two trading executives said. That wariness is the main reason discounts for Iranian Light have widened to $2.30-$2.40 a barrel against ICE Brent from about $2 a month ago, the executives and another source said. Among the inconveniences faced by the two sanctioned teapots, state-run Shandong Port Group, the main port operator in the province, has denied entry to vessels loaded with crude they have purchased, five trade sources said. That follows the port group's January ban on port calls by U.S.-sanctioned tankers. Shandong Port Group and Shengxing did not respond to requests for comment. A Luqing executive declined to comment. Large state banks have also stopped providing Luqing with operational capital for purchasing crude, forcing it to work with smaller banks, four of the sources said. The sources declined to be identified due to the sensitivity of the matter. Beijing says it opposes unilateral sanctions and defends as legitimate its trade with Iran, which ships about 90% of its oil exports to China. However, Chinese customs data has not shown any oil shipped from Iran since July 2022, with Iranian crude imports instead labelled as originating from Malaysia or other countries. SHIPPING, SALES HEADACHES The Shandong Port Group's banning of cargoes for the two refineries has forced them to discharge at other ports, according to three sources. In one case, the tanker Bei Hai Ming Wang carrying oil for the Shengxing refinery was rejected when it sought to land at the Laizhou port, controlled by Shandong Port Group, around April 21, according to a source familiar with the matter. It eventually unloaded on May 2 at the privately owned Wantong Crude Oil Terminal in neighbouring Dongying, data from analytics firm Vortexa showed. In another sign of trading disruption from the sanctions, two Asia-based oil product traders who had previously dealt with Luqing said they stopped doing so after it was sanctioned. In addition, no shipments of gasoline blendstock have been recorded since the end of March out of Laizhou port, used by Luqing for most of its blendstock exports, Kpler and LSEG shiptracking data showed. That contrasts with the first three months of this year when 83,000 metric tons (701,000 barrels) of methyl tertiary butyl ether, a key gasoline blendstock export, were shipped from Laizhou, accounting for 15% of China's total outflow of the blendstock. State giant CNOOC stopped supplying crude to Shandong Haihua Group's 40,000 barrel-per-day refinery, operated by Luqing, shortly after the U.S. sanctions were announced, three trade sources and a Shandong-based Chinese oil market consultant said. CNOOC did not respond to a request for comment. Calls to Haihua went unanswered. The two teapots have also begun selling product through new entities, according to seven trade sources, with Luqing using Shouguang Jiaqing Petroleum Sales and Shengxing selling via Shandong Xuxing Petrochemical. Calls to the two entities seeking comment went unanswered.
