US Blockade Cuts Iranian Oil Shipments to Chinese Buyers
The US blockade of Iranian oil shipments has led to a decline in offers for Iranian crude to Chinese buyers, causing prices to jump this week. According to trade sources, the number of offers for Iranian oil cargoes to China for September and October delivery has decreased from July and August cargoes.
Iran's oil exports have fallen since mid-July, with no visible crossings of the Strait of Hormuz by supertankers carrying Iranian crude. The squeeze threatens a key feedstock for independent refiners in China's eastern province of Shandong, which account for about a fifth of China's refining capacity and are the top buyers of sanctioned oil.
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. This is an abrupt shift as cargoes of Iranian Light were being offered earlier this week at a discount of around $3 a barrel.