Bloomberg: Iran Selling Oil to China at Steeper Discounts to Compete with Russia
Bloomberg News reported Sunday evening that with increased sales of cheap Russian oil in the Chinese market, Iran has been forced to sell its crude oil to China at greater discounts.
Following Russia’s military attack on Ukraine and Western sanctions against Moscow, China has become one of the major importers of Russian oil. This has led to competition with Iran, which, under heavy U.S. sanctions, views China as one of the few markets for selling its crude oil.
Russian oil exports to China reached a record in May, and OPEC+ was able to displace Saudi Arabia as the largest oil exporter to China.
Bloomberg writes that Iran, under these circumstances, has attempted to maintain its presence in the Chinese market by reducing its oil prices and has managed to preserve its current sales volume to the country, which is likely partly due to increased oil demand in China following a relaxation of coronavirus restrictions.
Vandana Hari, founder of energy consultancy Vanda Insights in Singapore, said: “The only oil competition between Iran and Russia can be in China, and this is entirely to Beijing’s benefit. This issue is likely difficult for oil producers in the Persian Gulf because they see their valuable markets slipping away due to cheap oil.”
China’s official statistics from the end of 2020 show only three months in which Iranian oil was exported to the country, including January and May of this year, but reports indicate that Iranian crude oil exports to the country have not declined.
According to a report by data analytics firm Kpler, Iranian oil exports to China, after a slight decline in April, reached more than 700,000 barrels per day in May and June.
Bloomberg writes that Iran is selling its oil to China at approximately $10 less than Brent crude to be able to compete with Russian oil, which is set to enter the Chinese market in August. This is while prior to Russia’s military attack on Ukraine, Iran was selling its oil to China at discounts of four to five dollars.
Source: Radio Farda
