China's Profit from Iran Sanctions; $300 Million Monthly Discount for Oil Sales to China

After Reuters reported that Iran's oil exports to China averaged 930,000 barrels per day in the first three months of this year, the website 'Eco Iran' announced that the Islamic Republic is providing a discount of $12 to $15 per barrel, totaling $300 million monthly for current sales. Last month, the Wall Street Journal reported that Iran is adding a large volume of its crude oil to the energy market at a discount amidst concerns about global demand. According to available data, Iran's oil shipments in May and June averaged about 1.6 million barrels per day, more than double compared to the previous year. This is the highest level of Iran's oil exports since 2018, which faced a recession due to U.S. sanctions. While providing an exact amount and final destination for Iran's oil sales is difficult due to the often-hidden nature of these transactions, data from several companies monitoring global energy trade indicates that China remains the main customer. According to a report by Kpler, Beijing directly imported 359,000 barrels of Iranian oil per day in May, an increase from 266,000 barrels in May of the previous year. China has repeatedly stated that it does not comply with U.S. sanctions against Iran, but since Washington reimposed sanctions, it has rarely disclosed its oil import data from the Islamic Republic. Syria and Venezuela are also major buyers of Iranian crude oil, both under U.S. sanctions. Iranian traders say that Iran is also seeing increasing interest in its oil from other buyers in Latin America and Africa. Iranian oil officials state that the country offers about a $30 discount per barrel compared to its Gulf rivals, including Saudi Arabia, and competes in the global market with cheap Russian oil. One of the winners in the current situation is China, which is buying cheap oil from Iran and Russia, storing or hoarding it to avoid problems in case oil prices rise in the future. According to available data, Beijing added about 1.77 million barrels of oil per day to its reserves in May, the highest level since July 2020.