Reuters: Despite US Sanctions, China Increases Oil Purchases from Iran

Interest in purchasing Iranian crude oil in China, the world's largest oil importer, is rising following Saudi Arabia and Russia's extension of supply cuts, which have increased global prices. According to Reuters, Tehran is increasing its oil production and exports despite US sanctions. Although small independent Chinese refineries, known as 'tea kettles,' purchase and stockpile Iranian oil at discounted prices to sell at higher prices when demand increases, large state-owned refineries in China continue to refrain from buying Iranian oil. Available data indicates that Iranian crude oil exports have reached approximately 1.5 million barrels per day, the highest level in four years, with over 80% sent to China. This increase in exports occurs as Washington and Tehran negotiate for a prisoner exchange and ways to release Iran's blocked assets abroad, a situation that has led some traders to hope for a reduction in US sanctions on Iranian crude oil sales. Eman Naseri, CEO of the consulting firm FGE, states, 'I think the Iranians have been given an unwritten license that as long as they continue informal negotiations, no further sanctions will be imposed on buyers of their crude oil.' He added that with the current low prices maintained, China's crude oil imports from Iran could increase from 200,000 barrels per day to 300,000 barrels, rising from 1.2 million barrels per day to 1.3 million barrels. However, this expert emphasizes that this amount could be limited based on buyers' risk tolerance and payment conditions. An archival photo of an oil tanker belonging to the National Iranian Tanker Company in the waters of the Persian Gulf. A senior US State Department official told Reuters that the United States continues to enforce sanctions against Iran's oil and petrochemical industries, and evading sanctions has been costly for Iran. He stated that the Iranian regime sells its oil at lower prices than the market, resulting in reduced revenue. The official added, 'Chinese state-owned companies have not resumed imports and refining of Iranian oil because US sanctions and the threat of secondary sanctions remain a deterrent.' Beijing has long opposed this Washington policy and has called for the lifting of sanctions against Iran. Iran exports about two million barrels of crude oil as well as condensates and other related products. According to informed sources, Tehran has increased its production to nearly 3.6 million barrels per day, close to a maximum of about four million barrels per day. Official Chinese data rarely reflects Iranian crude oil imports, which are usually recorded as shipments from Malaysia, Oman, or other Middle Eastern countries. A trader who wished to remain anonymous stated, 'Washington turns a blind eye to the transfer of Iranian oil at sea.' Analysts say that Iran's limited steps to slow uranium production close to weaponization may help reduce tensions with the US, but there has been no significant progress toward a broader nuclear agreement before the 2024 US elections. Opinion | Prisoner exchange 'for money' and the familiar limitations of diplomacy. Miller: Iran's funds in Qatar are 'under very strict supervision,' and if necessary, we will block them again. The US Department of Justice: More than 980,000 barrels of smuggled oil from the IRGC have been seized. The Gulf Cooperation Council warns the Islamic Republic about uranium enrichment and the Arash oil field. A Greek company pays $2.4 million in fines for smuggling Iranian oil. Oil prices have reached their highest level in the past 10 months. Exclusive; the US continues to enforce 'strict' sanctions against the Islamic Republic.