Free Trial

Iran-Israel Tensions Highlight on China’s Teapot Appetite for Iranian Crude

OIL

The escalation in tensions between Israel and Iran raises questions as to whether the flow of Iranian crude oil to China’s independent refiners can continue unabated, according to Platts.

  • Analysts and sources told Platts that Iranian volumes one of their favoured feedstocks. - are likely to remain intact for now.
  • If the situation between Israel and Iran escalates further, the US could tighten its sanctions enforcement on Iran and clamp down on its exports.
  • This would pressure the likes of Saudi Arabia to raise production and compensate.
  • Teapots are still likely to continue buying Iranian crude as there are few other buyers
  • China’s independent refineries imported 4.81m mt (1.14m b/d) of Iranian feedstock in March.
  • Iranian exports are often labelled as Malaysian origin.
  • Iranian light is currently being offered at a discount of $4-$4.50/b to ICE Brent on a DES basis, compared to Brent minus $12-$13/b in late October.

Source: S&P Global Commodity Insights

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.