Iran-China oil transactions delayed as Tehran insists higher pricing – Reuters

Iran is delaying crude oil shipment to China and demanding higher prices, Reuters reported citing sources familiar with the matter.

PHOTO: Flags of Iran and China. Getty Images

The cutback comes during a time when the world is seeing a crude oil supply crunch led by the Organization of the Petroleum Exporting Countries and Allies (OPEC+). Iran is also a core member of the coalition.

This move by Tehran could push up oil prices and help the OPEC+ coalition achieve a balance in the oil market. However, it could also hurt Chinese refiners and their profits.

Meanwhile, China has been one of Iran’s top clients since late 2019, according to Reuters. The country has been buying Iranian crude even after the US re-imposed sanctions on Iranian oil in 2018.

Iranian crude oil makes up about 10% of China’s total crude imports. The country imports about 30% of crude oil at discounted rates from sanctioned producers like Iran Venezuela and Russia.

"This [move] is considered as an extensive default and the order to hike prices apparently came from the headquarters in Tehran, as they're holding back supplies also to the intermediaries," Reuters cited a China-based source.

China imported about 1.18 million b/d crude oil from Iran in December 2023 and about 1.22 million b/d in November, Reuters further reported referring to data from cargo tracker Vortexa.

"The Iranians want to play catch-up in prices with (Russia's) ESPO. But they don't fully realise the extent of sanctions on Iranian oil is different from that on Russian," another Reuters source said.

By Aparupa Mazumder 

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