Iran's oil discounts to China hit 'highest level' in over a year

Trade sources announced that the Islamic Republic's discounts to China for purchasing oil from Iran have reached their highest level in more than a year.

According to a report by Reuters on Wednesday, November 27, each barrel of Iranian light crude oil is currently being sold at a discount of more than $8 to the Brent crude oil benchmark for delivery in December, while this discount was around $6 in September and around $3 in March.

The report adds that prices have fallen as much as $10 per barrel as buyers seek lower prices to offset the risks of sanctions and potential problems at Chinese ports when unloading cargoes.

The recent disruptions stem from new US sanctions against customers that Washington says have been involved in trading Iranian oil, 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.

Tightening sanctions against Russia and Iran have put pressure on independent refiners, who are already constrained by a lack of crude oil import quotas.

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

Trade sources said the sanctions have caused some buyers in China and India, two major customers of Russian oil, to stop buying, causing a sharp drop in the price of Russian crude and adding unsold cargoes from the country to Iran's ample reserves.

Kepler data shows that about 14 percent of China's crude oil imports come from Iran, but in September, those purchases fell to 1.2 million barrels per day, the lowest since May and below the average of 1.38 million barrels per day this year.

Source: Radio Farda