China’s independent refiners reduce Iranian crude purchases amid rising unsold cargoes and deeper discounts on rival Middle Eastern grades.
China’s independent teapot refiners are pivoting to Qatari, Iraqi, and UAE crude, purchasing 16 million to 20.5 million barrels in recent weeks. The shift follows a buildup of unsold Iranian cargoes as US sanctions snap back, pressuring Iranian Light discounts to $2 to $3 under Brent, while rival grades offer steeper $5 to $8 discounts.
Iranian crude imports to China fell to 556,000 barrels per day, the lowest since January 2023, as refiners avoid sanctions risk. The slowdown in Strait of Hormuz traffic after fresh US-Iran strikes adds to volatility, complicating Tehran’s efforts to clear its backlog.
The dynamic suggests Iranian export flows may remain structurally lower, even if political tensions ease, as rival producers aggressively defend market share in China’s refining hub.