China's Teapots Poised to Ramp Up Iranian Oil Buying Amid Stockpile Crunch
China's independent oil refiners, also known as 'teapots', are poised to increase their purchases of Iranian crude oil this month after stockpiles in Shandong province dropped to a record low. The drawdown was estimated at 35 million barrels in July, the largest monthly decline since Energy Aspects began tracking data in 2016.
Total Chinese crude oil imports rebounded in July from their decade-low in June, rising by 22% to an average of 8.45 million barrels per day (bpd) last month, according to customs data. This rebound is expected to continue with the independent refiners returning to buying higher volumes of Iranian oil.
The Middle East conflict has caused a significant spike in international crude oil prices, but China's massive stockpile of over 1.3 billion barrels of crude oil has allowed it to afford slashing imports and limiting purchases. However, this buffer is now dwindling, and the country may soon return to international markets.