Iranian oil supplies to China fall to 475,000 barrels per day — OilPrice

Iranian oil supplies to China fell to 475,000 barrels per day in September, down from 980,000 barrels per day in August. Since September 26, cargo arrivals in China have stopped, while no loadings were recorded throughout September at Kharg Island, Iran’s main export terminal, OilPrice reports.

Stocks on tankers are declining

According to the publication, Iran continued supplying crude to China thanks to stocks held on tankers in waters near South, Southeast and East Asia. In mid-April, these volumes amounted to around 160 million barrels. By the end of September, approximately 86 million barrels of Iranian oil remained afloat, including 23 million barrels within the Persian Gulf.

According to Kpler’s estimate cited by OilPrice, Iran’s onshore storage tanks were about 60% full and contained around 70 million barrels. The article’s author believes that if export restrictions continue, Tehran will have to reduce production: domestic refinery demand supports around 2.2 million barrels per day, while the pre-war production level of 3.2 million barrels per day may be unattainable.

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Chinese refineries seek alternatives

Independent Chinese refineries in Shandong province, which based their purchases on cheaper Iranian and Russian oil, are seeking crude in the Middle East, West Africa and South America. According to the publication, in mid-September, ten such refineries reportedly sent traders to Singapore to search for available cargoes.

At the end of September, Chinese authorities issued additional import quotas for 28.05 million tonnes of oil for non-state importers. The total annual volume of such quotas reached a record 257 million tonnes. At the same time, competition for Russian oil intensified: the premium for ESPO grade, according to data cited in the article, reached $28 per barrel over ICE Brent quotations, while Urals traded $7–8 per barrel above this benchmark.

OilPrice also writes that around 13 million barrels of oil per day pass through the Strait of Hormuz. The publication points to the risk of another disruption to these flows amid declining Iranian export revenues and the absence of a breakthrough in peace talks.