ALWAGHT- Western reports indicate that China is ramping up Iranian oil imports, as two giant tankers have discharged their shipments at Chinese ports.
China’s independent oil refiners, known as teapots, are ramping up their intake of Iranian crude from onshore tanks and ships waiting at sea following a fresh round of import quotas issued by Beijing last month, Bloomberg reported. Several processors based in Shandong province have been drawing crude from bonded storage, much of which had been purchased prior to the latest quota allocation.
Teapots, which dominate China’s purchases of cheaper crude from Iran and Russia, had scaled back imports in the fourth quarter due to exhausted allocations and sanctions-related restrictions. Beijing controls non-state refiner imports through a quota system, and while the latest round allocated roughly seven-to-eight million tons to about 20 teapots, overall demand is expected to remain subdued due to weak processing margins.
This week, two supertankers carrying Iranian crude, including the Panama-flagged Ill Gap with approximately 2 million barrels, unloaded at separate Chinese ports. Iranian crude held on tankers at sea has surged to more than 54 million barrels, the highest level in around two and a half years, reflecting strong Iranian exports alongside a limited pool of buyers willing to purchase oil at discounted rates amid sanctions.
Traders say Iranian crude is now being offered at discounts of $8–$9 per barrel to ICE Brent, up from around $4 in August. Many Chinese refiners have also consumed their allocations faster than usual this year due to stricter tax regimes on alternative feedstocks. Although Beijing has provided full-year quotas upfront since 2024 to aid planning, shortages before year-end remain common.
