Iran Sells Oil to China at Heavy Discount

According to a media report, the Islamic Republic is selling Iranian oil at three to five dollars below Brent crude oil standard due to lack of sufficient buyers. Iran’s oil exports to China in the current month reached approximately one million barrels per day.

Bloomberg’s website reported on Tuesday, March 16 (Esfand 26), that Iran’s cheap oil sales prevent OPEC from implementing its plan to supply less volume to the global market.

Iran is exempt from the production limits that OPEC has imposed on crude oil.

Bloomberg, citing oil traders and analysts, wrote that China imports approximately one million barrels of crude oil and gasoil from Iran daily, which is considered the highest level in the past two years.

According to oil market participants, the price of Iranian oil in China is usually between three to five dollars per barrel below Brent crude oil standard, a difference that has caused local companies to quickly proceed with purchasing and stockpiling Iranian oil given the rising global prices.

Based on Bloomberg’s report, part of the shipments arriving in China are loaded directly at Iranian ports, and part are offered as products of other countries.

It is said that the two companies “CNPC” and “Sinopec”, which have developed Iran’s Azadegan and Yad Avaran oil fields, receive part of Iran’s exported oil to settle this country’s debts and no money reaches Iran for it.

Sales Through Intermediaries

China is considered the world’s largest oil buyer. Buyers of Iranian oil in this country are trading companies because the country’s state and private refineries refrain from direct dealings with the Islamic Republic due to American sanctions.

Iran’s cheap sales are pushing out its oil rivals such as Angola, Brazil, and Norway from the market. Bloomberg writes that approximately 10 million barrels of Angola oil earmarked for export in the coming month had not found a buyer by Monday.

Three giant Norwegian tankers have been waiting on Chinese shores for two weeks to unload.

Bloomberg’s report states that most refineries and oil brokers around the world are reluctant to buy Iranian oil because they fear punitive reaction from the United States.

Source: DW