Chinese Imports of Iranian Crude Stall on Higher Prices

Chinese purchasing of Iranian oil has stalled as Tehran demands higher prices and in turn withholds shipments, which could squeeze margins for Chinese refiners, refinery and trade sources told Reuters.

• Iran told Chinese buyers in early December they were narrowing discounts for December and January deliveries of Iranian Light crude to 5-6$/bbl below Brent, compared with a discount of around 10$/bbl and an average of 13$/bbl in 2023, several traders said.
• Discounts could narrow further as the latest offer heard was 4.50$/bbl, a trader said.
• "This is considered as an extensive default and the order to hike prices apparently came from the headquarters in Tehran, as they're holding back supplies also to the intermediaries," a China-based trading executive said.
• An executive at a Chinese middleman that procures direct from Iran said the OPEC producer was "holding back some shipments", leading to a "stalemate" between Chinese buyers and Iranian suppliers.
• China imported around 1.18mbpd of Iranian oil in December, down from 1.22mbpd in November and 1.53mbpd in October, Vortexa data showed.
• Chinese teapots account for around 90% of Iran's total oil exports, usually passed off as oil originating in Malaysia or the UAE, trade sources said.