Iranian Oil Tankers Idle Off Malaysia Amid Weak Chinese Demand

A cluster of oil tankers carrying Iranian crude is idle off eastern Malaysia due to weak Chinese demand.

The tankers, laden with Iranian Light, are being offered at a discount of around US$5 per barrel to ICE Brent, compared to about US$2.50 two weeks ago.

China's independent refiners, known as teapots, have reduced processing rates below seasonal levels due to razor-thin margins, leading to an increase in Iranian crude on the water by 60% since the US naval blockade was reimposed in mid-July.

The total volume of Iranian crude on the water has remained steady at over 130 million barrels, according to Kpler and Vortexa, which includes laden tankers within the Persian Gulf that haven't been able to exit.