Chinese Independent Refineries Reportedly Purchase Iranian Crude at a Premium for the First Time in Years

Reuters reported on the 10th that, affected by the Middle East conflict, the United States has temporarily exempted sanctions on Iranian oil at sea, and India is expected to receive a batch of Iranian crude for the first time in seven years. Under the influence of sanctions, Iranian crude is usually sold at a discount to Brent crude, and Chinese independent refineries have been the largest buyers. Informed sources revealed that at least two refineries in Dongying, Shandong, China, recently purchased Iranian light crude at a premium of $1.5 to $2 per barrel over ICE Brent crude. Before the outbreak of the Middle East conflict, this type of crude was usually about $10 per barrel lower than Brent. Informed sources stated that this is the first time since 2022 that Chinese independent refineries have purchased Iranian crude at a price higher than Brent. This batch of crude is currently anchored in waters near China and is expected to be delivered this month. These refineries sought to procure Iranian crude in the spot market after obtaining a new batch of crude import quotas issued by Beijing. Previously, Brent crude futures prices fell by 13% on the 8th due to news of a US-Iran ceasefire, falling below $100 per barrel; however, as shipping in the Strait of Hormuz remained largely stagnant, oil prices rebounded by about 1% on the 9th. China raised the maximum retail price of domestic refined oil this week, with gasoline increasing by RMB 420 per ton and diesel by RMB 400 per ton. Traders pointed out that with the decline in crude oil costs and the increase in domestic refined oil prices, the profits of independent refineries have improved, prompting these independent refineries to seek to procure Iranian crude as soon as possible. (Edited by: Chou Hui-ying/Chu Chien-ling) 1150411