US Blockade Cuts Iranian Oil Exports to China Amid Sanctions Threat
The US blockade of Iran's shipping and ports has significantly reduced Iranian oil exports to China.
The number of offers for Iranian oil cargoes to China for September and October delivery has declined from July and August, according to four trade sources familiar with the matter. The decline is due in part to barrels already in ships on the water having been sold.
Iran's oil exports have fallen since mid-July, with no visible crossings of the Strait of Hormuz by supertankers carrying Iranian crude since then, according to data from ship-tracking company Kpler. Iranian crude held in floating storage outside the US blockade zone has fallen to about 80 million barrels from about 105 million barrels before the blockade was reinstated.
The squeeze threatens a key feedstock for independent refiners, known as teapots, located in China's eastern province of Shandong. Three of the trade sources said some Iranian crude, typically sold at discounts, was being offered at premiums to ICE Brent futures, with one source citing a premium of about $2 a barrel.
Chinese independent refiners are now looking beyond Russia and Iran for supplies, as US Treasury Secretary Scott Bessent threatened Iran with 'the toughest sanctions in history' on Thursday.