Chinese Independent Refiners Turn to Iraq, Qatar as Iranian Crude Supplies Dwindle
Chinese independent refiners booked at least 12 million barrels of Iraqi and Qatari crude as Iranian supply cuts tighten access to cheaper feedstock.
- Chinese independent refiners secured at least 12 million barrels of Iraqi and Qatari crude for October and November delivery to replace dwindling Iranian supplies after a rigorous US blockade trapped tankers off the Chinese coast.
- The rigorous US blockade linked to regional tensions has trapped at least 50 tankers transporting Iranian petroleum off the Chinese coast, halting a key supply source that previously provided over one million barrels daily.
- Major commodities trading firms including Mercuria Energy Group and Trafigura Group facilitated the deals, with private refiners like Hongrun Petrochemical purchasing 3 million barrels of Qatar's al-Shaheen crude for early November arrival.
- Refinery utilization rates in Shandong fell to about 55% by late September from nearly 60% at month start, as refiners lost up to 500 yuan per metric ton amid surging feedstock costs and margin deterioration.
- Iraqi oil has emerged as the new benchmark for these refiners due to ample availability, supported by a steady recovery in total exports leaving the Arabian Gulf via the Strait of Hormuz.
15 Articles
15 Articles
The Economic Times
Times of IndiaChinese independent refiners turn to Iraq, Qatar as Iranian crude supplies dwindle
Chinese independent refiners have turned to buying Iraqi and Qatari crude as Iranian supplies dwindle. The traders report purchases totaling up to 20 million barrels from regional trading houses. Refining margins have weakened due to a cap on fuel prices and rising crude costs. As a result, refinery utilization rates have fallen significantly in Shandong. The situation reflects broader shifts in crude supply dynamics amid geopolitical tensions.
Analysis: Is China learning to live without Iranian oil?
In the cat-and-mouse game of US naval blockades and oil sanctions, small, fleet-footed independent refineries in China may be gifting Washington the economic leverage over Tehran that it has been struggling to achieve. It is not that China’s so-called teapot refineries are taking sides. Rather, it is pragmatic economic self-interest that is increasingly pushing the Chinese to replace sanctioned Iranian crude oil with supplies from Iraq and Qatar…
Independent Chinese refining companies increased their purchases of Iraqi and Qatari oil to offset the decline in Iranian supplies, while exports from other Gulf States recovered through the Strait of Hormuz.
The independent Chinese refineries have intensified their purchases of Iraqi oil, particularly Basra's "medium and heavy" crudes, to offset the decline in Iranian supplies, at a time when oil exports from Gulf producers across the Strait of Hormuz recovered.
Coverage Details
Bias Distribution
- 50% of the sources are Center
Factuality
To view factuality data please Upgrade to Premium
