OIL: China Increases Iranian Crude Imports at Dalian Port

A rise in China’s imports of Iranian crude at the port and refining city of Dalian since late last year have helped maintain near record purchases of the oil, according to Reuters.

• The increase has coincided with weaker demand from with Shandong independent refiners amid higher crude prices and weaker-than-expected fuel demand.
• A total of 45m barrels on 23 cargoes of Iranian oil was discharged at Dalian and Changxing island between October 2023 and June 2024, according to Vortexa and 34mbbls at Dalian according to Kpler.
• Dalian accounts for 6% of China's crude processing capacity and had previously only received a few Iranian oil shipments in recent years.
• The imports equates to roughly 13% of China's total Iranian oil imports during H1 2024.
• Possible destinations for the Dalian shipments are Hengli Petrochemical's 400kbpd refinery complex and 44mbbl storage, two PetroChina refineries, and a 30mbbl storage at Changxing island. There is no pipeline connecting the storage facility to refineries outside Dalian, sources said.
• Hengli bought 4-6mbbl a month during the first few months of 2024, sources suggested.