WANA (Dec 03) – After Beijing issued a new round of import quotas late last month, China’s independent refiners have increased their intake of Iranian crude oil.

 

According to reports citing sources familiar with the matter, several refineries in Shandong Province received crude this week from bonded storage tanks at ports and refinery sites. Much of the crude had been purchased prior to the latest quota allocation.

 

China’s private refineries—known as “teapots”—are major buyers of Iranian and Russian crude. However, due to depleted quotas and the effects of sanctions, they were forced to scale back purchases in the fourth quarter. Beijing operates a quota system that regulates how much crude non-state refiners can import.

 

Even so, overall demand from the teapots is expected to remain subdued through the end of the year, partly because of weak refining margins, according to industry analysts.

 

Officials typically provide guidance on annual quota totals but do not disclose details of allocations issued throughout the year, which determine the actual amount available. Analysts say roughly 20 independent refiners received between seven and eight million tonnes of import quotas in the most recent round.

 

Ship-tracking data indicate that two supertankers carrying Iranian oil, which had been anchored off China’s coast, discharged their cargoes at separate ports this week.

 

Traders report that some Iranian light crude cargoes were offered this week at discounts of around $8–$9 per barrel to ICE Brent, compared with discounts of about $4 in August.

 

According to industry assessments, many Chinese refiners consumed their quotas faster than usual this year due to stricter tax rules on alternative feedstocks such as fuel oil. Since 2024, refiners have received annual quotas in advance to aid planning, but the system often leaves them short of allocations well before the end of the year.

WANA - Iran Boosts Oil Output

Iran Boosts Oil Output. Social media/ WANA News Agency