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Iraq & Qatar Crude Replace Iran for China
6 Oct
Summary
- China refiners buy millions of barrels of Iraqi and Qatari crude.
- Iranian oil imports to China nearly halved in September.
- Refining margins in Shandong are weakening significantly.
Chinese independent refiners are significantly increasing their purchases of crude oil from Iraq and Qatar for October and November deliveries. This strategic shift aims to replace dwindling supplies from Iran, a traditional major supplier. Traders report that Chinese refiners have acquired at least 12 million barrels of Iraqi and Qatari crude.
These purchases primarily include Iraqi Basra Medium and Heavy grades, which have become a benchmark for Chinese refiners due to their availability and prompt delivery. Qatar's Al-Shaheen crude was also among the acquired cargoes. This move occurs as China's imports of Iranian oil have nearly halved in September compared to the previous year.
Meanwhile, refining margins in China's Shandong province have weakened considerably. Refinery utilization rates fell by approximately 5% in late September, and refiners are now facing losses on each metric ton of processed fuel. This economic pressure on refiners contrasts with the increased demand for non-sanctioned Gulf crude.
