Iranian crude offered to China at discount

Iranian crude has been slashed for Chinese buyers in an effort to entice interest from independent oil refiners, which have reduced operating rates to stem losses from weaker margins.

Prices for Iranian Light for July arrival were offered at a discount of more than $1 a barrel to ICE Brent benchmarks, compared with a premium last month, said traders who participate in the market. Russian crude that is shipped from the country’s far east has also been lowered, they added.

China’s independent refiners, known as teapots, are the biggest buyers of Iran’s crude but they have faced mounting economic pressure as razor-thin margins pushed deeper into the red. Beijing had instructed the processors to make fuels at all costs to help cushion the impact from the conflict in the Middle East, though that mandate is set to be relaxed after their losses increased.

ADVERTISEMENT

CONTINUE READING BELOW

Flows of Iranian oil to China fell to 1.1 million barrels a day in May, the lowest since January 2025, according to data from Kpler. There’s currently close to 56 million barrels of the nation’s crude idling on vessels globally, with over 60% of the ships anchored in the Singapore Strait and off China, the data shows.

ADVERTISEMENT:

CONTINUE READING BELOW

Chinese independent refiners typically account for about 90% of Iran’s oil sales, but the US has ramped up sanctions on the trade in an effort to force Tehran into a peace deal. Giant independent refiner Hengli Petrochemical (Dalian) Refinery Co was the most recent entity targeted by Washington.

Separately, prices for Russia’s flagship ESPO crude have been reduced to a premium of $3 to ICE Brent due to lackluster buying interest from Chinese teapots, down from a $6 premium last month, the traders said. They asked not to be named because the information is not public.

© 2026 Bloomberg

#Iranian #crude #offered #China #discount