ALBAWABA – China oil imports from Iran may hit a decade high in August at around 1.5 million barrels per day, news agencies reported Wednesday.
Estimates range between 1 and 1.5 million barrels a day, according to Zawya and Bloomberg.
At 1.5 million barrels per day, China oil imports from Iran this month would be the highest since 2013, according to estimates from data intelligence firm Kpler, as reported by Bloomberg.
However, China oil imports monitoring company Vortexa expects importers to bring in about one million barrels a day of Iranian crude this month, compared with 1.3 million in December 2022, Zawya reported.
Even at one million barrels per day, China oil imports from Iran in August would set the record for 2023.
In the period from January through July, China oil imports from Iran averaged around 917 thousand barrels of oil per day.
Why did China oil imports from Iran surge in August?
Meanwhile, Iran’s two main grades of oil are currently trading at a discount exceeding $10 a barrel of Brent crude, traders said, which is considerably cheaper than Russian crudes, Zawya reported.
“The higher flat prices go, the better risk-reward ratio for Shandong refiners to look for Iranian crude,” said Homayoun Falakshahi, a senior oil analyst at Kpler.
However, customs data do not show any China oil imports from Iran since mid-2022, according to Zawya.
“With lower Russian crude supplies, Chinese teapot refiners that largely boosted Russian grades imports since Q2 last year, are expected to lean towards the deeply discounted Iranian barrels or other heavy feedstocks, as Shandong partially re-allowed non-crude imports recently,” Emma Li, China Market Analyst at Vortexa, said.
Due possibly to the discounts, Iran’s oil exports have recently jumped to a five-year high of 1.4 million barrels per day, according to OilPrices.com.
“State-run refiners, on the other hand, will likely import more crude from West Africa and the Americas, as attractive light-sweet crude margins encourage spot purchases against rising Saudi and Russian crude prices,” she added.
In the meantime, Iran is looking to boost its oil production to 3.5 million barrels per day by the end of September this year.
