More than five months after the US ended sanctions waivers for Iran’s biggest oil buyers, the Trump administration continues to press China to stop importing Iranian crude oil, Brian Hook, the US State Department’s special representative for Iran, said Wednesday. “We hope that China decides that it will no longer import Iranian crude oil,” Hook said during a Senate Foreign Relations Committee hearing. “It’s not an exotic grade, we have a well-supplied oil market and there has been no interruption of China’s energy needs during this period. so there is no need for them to import Iranian crude oil.”
Iranian oil exports, which averaged more than 1.7 million b/d in March, fell below 500,000 b/d in August and September, based on preliminary estimates compiled from cFlow, S&P Global Platts trade flow software, and shipping sources. Around 200,000 b/d to 250,000 b/d of Iranian exports in September flowed to China, according to preliminary tracking. Last month, the US Treasury Department sanctioned six Chinese entities and their top executives, including two affiliates of Cosco Shipping, for trading oil with Iran in violation of US sanctions. The US had previously sanctioned China’s state-owned trading company Zhuhai Zhenrong and its top executive for oil trade with Iran.
In the past few months, a large share of Iranian oil flowing to China has been going via the UAE and Malaysia, both of which are popular hubs for ship-to-ship transfers, according to Platts cFlow data and shipping sources. In recent months, Iran has resorted to storing oil in VLCC tankers in UAE and Malaysian waters. Some of these tankers are used to offload crude oil into other tankers in the region, according to sources.
China has also recently been offloading Iranian oil from bonded storage in Dalian in northern China, according to sources. Late last year, state-owned National Iranian Oil Company sent more than 20 million barrels to Dalian, where it had leased storage tanks to enable China access to Iranian oil post sanctions, according to Platts cFlow. Representatives at Iran’s oil ministry were unavailable for comment.