Iran’s Oil Discounts to China Reach ‘Highest Level’ in Over a Year

Trade sources reported that the Islamic Republic’s discounts to China for purchasing Iranian oil have reached their highest level in over a year.

According to Reuters’ report on Wednesday, November 7th, each barrel of Iranian light crude oil is currently being sold with a discount of more than “eight dollars” compared to the Brent crude oil index for December delivery, whereas this discount was around “six dollars” in September and about “three dollars” in March.

The report adds that prices have declined by as much as 10 dollars per barrel, as buyers are seeking lower prices to compensate for sanctions risks and potential difficulties at Chinese ports when unloading cargoes.

Recent disruptions stem from new U.S. sanctions against customers that Washington says have been involved in Iranian oil trade, including four Chinese refineries as well as ports and ships.

According to traders, these measures have collectively disrupted Iranian oil sales and increased fear of sanctions among buyers.

Intensified sanctions against Russia and Iran have pressured independent refineries that were already limited due to lack of crude oil import quotas.

The United States, Britain, and the European Union recently imposed a wave of commercial restrictions on major Russian oil producers and other industry players in an effort to bring Vladimir Putin, the Russian president, to the negotiating table to end the war in Ukraine.

Trade sources said these sanctions have caused some buyers in China and India, two major customers of Russian oil, to halt their purchases, which has resulted in a sharp decline in Russian crude oil prices and added unsold Russian cargoes to Iran’s abundant reserves.

Kpler data shows that approximately 14 percent of China’s crude oil imports come from Iran, but in September the volume of this purchase decreased to 1.2 million barrels per day, which is the lowest level since May and lower than the average of 1.38 million barrels per day during this year.

Source: Radio Farda