SINGAPORE: Chinese independent refiners have purchased Iranian oil at premiums to Brent for the first time in several years, as benchmark prices declined and amid expectations of increased Indian buying following Washington’s temporary sanctions waiver.
India is expected to receive its first shipment of Iranian crude in seven years after the United States temporarily eased sanctions on Iranian oil transported at sea due to the impact of the conflict in the Middle East.
Iranian crude has traditionally traded at a discount to Brent due to sanctions, with Chinese independent refiners—known as “teapots”—being its largest buyers.
At least two refiners in Dongying, a key hub for independents in eastern Shandong province, recently purchased Iranian Light crude at premiums of $1.50 to $2 per barrel over ICE Brent, according to trade sources. This marks a sharp reversal from discounts of around $10 per barrel seen before the recent conflict.
The cargoes are currently floating near China and are expected to be delivered this month, sources said. One source noted it was likely the first time since 2022 that teapot refiners have paid a premium over Brent for Iranian oil.
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