China's "teapots", or small independent refiners, are stocking up on Iran's discounted oil in order to fill strong seasonal demand, Reuters reported citing data from consultancies FGE and Vortexa.
Iran's crude exports of about 1.5 million barrels per day (bpd) stand at their highest in more than four years, with more than 80 percent shipped to China, data from consultancies FGE and Vortexa explains.
Iman Nasseri, managing director of FGE, noted that imports of Iranian crude by China's independent refiners could rise another 200,000 bpd to 300,000 bpd, from 1.2 million bpd to 1.3 million bpd now, if prices stay low, although volumes could be capped by buyers' risk appetite and payment constraints.
A senior State Department official, speaking on condition of anonymity, told Reuters that the United States continues to enforce the sanctions on Iran's oil and petrochemical industries.
Beijing has long said it opposes Washington's “long-arm” jurisdiction and has urged that sanctions on Iran be dropped.
Iran is exporting about two million bpd of crude oil as well as condensate and products, as Tehran has boosted production to nearly 3.6 million bpd, say people familiar with the matter, or near its maximum of about four million bpd.
In China, traders and analysts say, Iranian oil is bought by independent refineries concentrated in the coastal province of Shandong.
According to figures from the Organization of Petroleum Exporting Countries (OPEC), Iran continued to increase its oil production in August to reach a milestone figure of three million bpd.
OPEC data cited in reports published in local Iranian media on September 13 showed that Iran’s oil output had increased by 143,000 bpd or five percent last month compared to production figures reported in July.
The figures showed that Iran had regained its position as the third largest oil producer in OPEC in August behind Saudi Arabia and Iraq.
Source: Tehran Times