Iranian Oil Deliveries to China Drop to Lowest Level

Data from international tanker-tracking firms reveals that Iran's oil exports and deliveries to China dropped to their lowest level in 17 months last month, a trend that has unfolded concurrently with the intensification of US naval pressure and declining demand from Chinese refineries.

According to this data, daily deliveries of Iranian oil to China fell to approximately 1.1 million barrels last month. Furthermore, oil loading from Iranian ports has plummeted to around 300,000 barrels per day since the start of the US naval blockade on the Islamic Republic, while oil exports to foreign markets are estimated to be between 120,000 and 260,000 barrels per day.

This comes even though Iran's oil exports averaged around 1.6 million barrels per day last year and had even neared the threshold of 2 million barrels per day during the initial months of the current year.

The sharp decline in exports has forced the Islamic Republic to rely more heavily than before on its floating oil reserves in Asian waters to sustain supply to its Chinese customers. Estimates from energy-tracking firm Kpler indicate that the volume of Iranian oil stored on tankers in East Asia has dropped from roughly 130 million barrels to 79 million barrels.

At the same time, Reuters has reported that slumping demand from independent Chinese refineries has forced Iran to once again resume its policy of oil discounts. According to this report, Tehran is now offering Chinese buyers discounts ranging from 50 cents to one dollar per barrel of oil.

This is occurring while Iran's oil discounts had ground to a halt following the onset of the crisis in the Strait of Hormuz and the subsequent surge in global oil prices. Previously, Kpler's estimates indicated that the discount rate for Iranian oil occasionally exceeded 10 dollars per barrel during the final months of last year.

Reports also suggest that small, independent Chinese refineries, which serve as the primary buyers of Iranian oil, are operating at lower capacities due to rising oil prices on global markets and are less inclined to purchase new shipments.

Meanwhile, China's overall oil imports have also fallen sharply. According to statistics, the country's oil imports dropped by about 20 percent in March and April and plummeted by nearly 50 percent in May. Kpler's data also shows that China's oil imports from Iran last month decreased by 18 percent compared to April and by 36 percent compared to March.