Bloomberg: Iran sells its oil to China at a higher discount to compete with Russia
Bloomberg News reported on Sunday evening that Iran has been forced to sell its crude oil to the Chinese at a greater discount as cheap Russian oil sales in the Chinese market have increased.
China has become a major importer of Russian oil following Russia's military invasion of Ukraine and Western sanctions against Moscow. This has led to competition with Iran, which sees China as one of the few markets for its crude oil under heavy US sanctions.
Russian oil exports to China hit a record in May, and OPEC+ was able to replace Saudi Arabia as the largest oil exporter to China.
Bloomberg writes that Iran has tried to remain in the Chinese market by reducing its oil prices and has been able to maintain its current sales to the country, which is probably due to the increased demand for oil in China due to the easing of restrictions caused by the coronavirus.
“The only oil competition between Iran and Russia could be in China, and that would be entirely to Beijing’s advantage,” said Vandana Harry, founder of energy consultancy Wanda Insights in Singapore. “This is likely to be difficult for Gulf oil producers as they see themselves losing valuable markets to cheap oil.”
Official Chinese statistics show that Iranian oil was exported to the country for only three months since the end of 2020, including January and May of this year, but reports indicate that Iranian crude oil exports to the country have not decreased.
According to a report by data analytics firm Kepler, Iranian oil exports to China reached more than 700,000 barrels per day in May and June after a slight decline in April.
Bloomberg writes that Iran is selling its oil to China at a price of about $10 less than Brent crude in order to compete with Russian oil, which is scheduled to enter the country's market in August. This is while before Russia's military invasion of Ukraine, Iran was selling its oil to China at a discount of four to five dollars.
Source: Radio Farda
