The Cradle, August 16, 2023 —
Beijing is set to purchase upwards of one million barrels of Iranian crude per day this month.
Iranian oil exports to China are set to reach a 10-year high this month as the Asian giant will take about 1.5 million barrels per day (bpd), according to data and analytics firm Kpler.
Beijing has been importing an average of 917,000 bpd of Iranian oil since the start of the year, often classifying it as coming from Malaysia. According to Bloomberg, deliveries to China have sped up recently after authorities eased a probe into imports of bitumen mixture, which Iranian oil is often disguised as after being mixed with Venezuelan crude to bypass unilateral US sanctions.
Furthermore, traders say Iran’s two main grades of crude oil currently have a discount of over $10 per barrel, making it an attractive proposition at a time of surging fuel prices.
“The higher flat prices go, the better risk-reward ratio for Shandong refiners to look for Iranian crude,” Homayoun Falakshahi, a senior oil analyst at Kpler, told Bloomberg.
Earlier this month, Kpler revealed that Iranian oil exports to China tripled over the past three years.
The rise comes despite an ever-tightening sanctions regime imposed by the US since their unilateral exit from the Joint Comprehensive Plan of Action (JCPOA) in 2018 and the rampant smuggling of Iranian oil in the Persian Gulf.
The US withdrew from the Obama-era deal and reimposed a series of economic sanctions attempting to squeeze Iranian oil exports and curtail the country’s access to the international financial system, Foreign Affairs reported at the time.
Non-oil exports from Iran to China have also surged in recent months, as the Islamic Republic of Iran Customs Administration (IRICA) revealed on 15 August that, during the first four months of the current Iranian calendar year, $4.644 billion worth of goods were delivered to Chinese ports.
Iran and China officially signed a 25-year comprehensive cooperation agreement in March 2021.
The two nations are also working to deepen defense cooperation. Chinese Defense Minister Li Shangfu said Tuesday that his country is “committed” to improving defense ties with the Islamic Republic. He made the comments during the Moscow Conference on International Security.