SINGAPORE, March 30 (Reuters) – China reportedly received huge amounts of cheap Iranian oil masquerading as crude from other sources in March, curbing the world’s leading importer’s appetite for products from other suppliers, according to traders and analysts.
About a million barrels per day (bpd) of Iranian crude would be arriving in China in March, almost half the volume that Saudi Arabia supplied to the Asian giant in the first two months of this year.
Refinitiv Oil Research estimates March arrivals at 3.75 million tons (27 million barrels), beating the January record of 3.37 million tons.
“The trend appears to be continuing, although buying appetite is declining due to high inventories in ports and abundant supplies,” said Emma Li, senior analyst at Refinitiv.
A commercial source familiar with the movements of Iranian ships put shipments bound for China at 30 million barrels in March, while Sara Vakhshouri, president of SVB Energy International, estimated that the Islamic republic’s oil exports this month exceeded. one million bpd.
Reuters reported in February that China accepted a record Iranian oil in early 2021, despite US sanctions aimed at penalizing buyers. Analysts say the purchase was a key factor behind Brent prices plummeting to $ 70 a barrel, limiting room for OPEC to increase production.
Without directly commenting on the March oil transactions, China’s Foreign Ministry said on Tuesday that Beijing has “consistently opposed” unilateral US sanctions and urged Washington to lift those “illegal” measures as soon as possible.
China’s trade and energy ministries did not respond to requests for comment.
“Iran is exporting more oil to China and that poses a challenge to the US sanctions regime,” said Henry Rome, an analyst at Eurasia Group. “However, the sanctions structure is by no means on the brink of collapse, especially since Iran is unable to repatriate much of that revenue.”
According to Refinitiv’s Li, some 650,000 bpd of Iranian oil came out in the first 19 days of March, mainly through eastern Shandong province, the hub of China’s independent refineries. That compares with 490,000 bpd downloaded in February and a record 797,000 bpd in the first month of the year, he added.
(Asia Energy team report, additional report by Jonathan Saul, Alex Lawler in London and Shivani Singh in Beijing. Edited in Spanish by Javier Leira)