Iran’s oil shipments to China triple despite US sanctions
Iran’s oil shipments to China have more than tripled over the past three years, despite the US sanctions on the country and the increase in Russia’s shipments to China. According to data released by data analytics firm Kepler, Iranian crude exports to China have been consistently around one million barrels per day (bpd) in 2023, compared to approximately 325,000 bpd in 2020.
The upward trend of Iranian oil shipments to China began in 2019, with exports reaching 585,000 bpd in 2021 and 766,000 bpd in 2022. The International Energy Agency (IEA) also confirmed Iran’s daily export of one million barrels of oil to China in its recent report titled “Oil 2023.”
The report stated that despite severe financial restrictions, Iran managed to increase its crude oil production by 140,000 barrels per day in 2022 to an average of 2.5 million barrels per day, energyportal.eu reported.
Official data shows that Iranian oil production has also increased this year, with the country’s oil output reaching 2.9 million bpd in May, 350,000 bpd higher than in 2022. Chinese private refineries have been buying more Iranian oil, even amidst rising competition from Russia. These refineries, known as teapots, have prioritized Iranian oil as Russian supplies become more expensive.
China’s imports of Iranian crude and condensate saw a 20 percent month-on-month increase in March, reaching 800,000 barrels per day. Analysts expect this trend to continue in the coming months. Although Iranian oil has long been sanctioned by the US, refiners in China have remained a consistent outlet for the country’s exports. The private refiners in Shandong, in particular, have emerged as key players in the Iranian oil market, according to industry experts.
Despite the negative impacts of US sanctions, Iran has successfully ramped up its oil production and exports in recent months. Iranian President Ebrahim Raeisi announced that the oil and gas sector experienced a growth of nine percent in the past Iranian calendar year, (which ended on March 20). Oil Minister Javad Oji also predicted that a new record high will be reached in the country’s oil export in the current Iranian calendar year. In November 2022, President Raeisi also highlighted that Iran’s oil exports had reached pre-sanction levels.
According to the US Energy Information Administration (EIA), Iran’s average oil production in 2022 was 2.54 million bpd, an increase of 140,000 bpd from the previous year. In 2021, Iran’s oil production reached around 2.4 million bpd.