Looming US sanctions on Iran put China oil buying in spotlight
The US renewed its blockade of Iran's ships and ports on July 13 in an attempt to cut off oil sales as a deal to halt their war broke down, throttling Iranian exports.
China has for several years been the biggest buyer of Iranian oil, putting its purchases in the spotlight as the US threatens heavy economic sanctions on Tehran.
Treasury Secretary Scott Bessent was scheduled to hold a press conference at 1 p.m. EDT (1700 GMT) on Monday.
Following are key details on China's oil trade with Iran, which last year averaged 1.4 million barrels per day, according to ship-tracking firm Kpler.
Keep updated, follow The Business Standard's Google news channel
HOW MUCH OIL DOES CHINA CURRENTLY BUY FROM IRAN?
Less than it used to.
There have been no visible crossings of the Strait of Hormuz since then, according to Kpler data, although many vessels turn off their location transponders, making them difficult to track.
Shipments fell to 785,000 barrels per day in June, the lowest since February 2023 and probably rose in July to 823,000 bpd, but the intake so far in August has dropped to 534,000 bpd, provisional Kpler data showed.
WHO ARE THE CHINESE BUYERS?
Chinese independent refiners have been the main Iranian crude buyers, attracted by what has typically been a steep discount to mainstream barrels.
China's big state refiners have shunned Iranian oil since 2019, when the US reimposed sanctions on Tehran, and China's official customs data does not show any purchases of Iranian crude.
Iranian oil delivered to China has long been branded as Malaysian, and more recently Indonesian, and is settled in Chinese currency, trading in a tight loop involving a chain of difficult-to-track intermediaries, refinery sources and traders involved in the business have said.
HAVE PREVIOUS US SANCTIONS BEEN EFFECTIVE?
Washington has intensified its efforts to clamp down on Chinese purchases of Iranian oil since President Donald Trump returned to the White House early last year, imposing sanctions on mostly smaller Chinese refiners and other participants in the supply chain, which have in some cases proven disruptive.
The US Treasury Department has also warned two larger Chinese banks they could face secondary sanctions if Iranian funds were found moving through their systems, but has stopped short of designating them.
In April, Washington imposed sanctions on Hengli Petrochemical (Dalian) refinery, along with about 40 shipping firms and vessels, accusing Hengli of buying billions of dollars worth of Iranian oil, escalating its efforts to curb Tehran's oil revenue. Hengli has denied buying Iranian oil.
However, sanctions themselves have done little to slow overall flows of Iranian oil into China.
China's Iranian oil imports stood at 1.24 million and 1.58 million bpd in January and February, respectively, Kpler data showed.
WHAT DOES CHINA SAY?
China, which has said it rejects unilateral sanctions, has called for a resolution through diplomatic and political means.
