Seaborne oil exports from Iran to China hit record levels

April 18, 2025, 6:30 AM

An oil tanker docks at Qingdao Port in China's Shandong province, where most of the crude imported from Iran is delivered

China anticipates supply disruption
Iranian exports reach 1.8m bpd
50% jump compared to 2024

Chinese imports of oil by sea rose in March to their highest in 17 months, with imports from Iran hitting a record, according to tanker tracking consultancy Vortexa.

Seaborne crude arrivals – which account for about 85 percent of total Chinese oil imports – rose to 10.6 million barrels per day in March, up from 9.7 million bpd the month before, said Vortexa. That was the most since October 2023.

Imports from Iran, which has long been sanctioned by the US and other countries, climbed to a record 1.8 million bpd, a jump of nearly 50 percent compared with the 2024 monthly average.

Most of that was delivered to Shandong province, a hub for China’s independent refiners or “teapots”, so called because they are small and limited in complexity compared to large, state-owned oil refineries.

Refiners in China, the world’s second largest economy, are snapping up Iranian barrels at steep discounts, anticipating potential supply disruptions because of stricter US sanctions, Vortexa said.

While talks between Tehran and Washington on reviving a 2015 deal around Iran’s nuclear programme have resumed, the outcome is uncertain.

“If US-Iranian talks lead to sanctions relief, China may continue to increase direct Iranian crude imports; otherwise, illicit imports will continue, proving the strength of China’s diversified oil supply strategy,” said Vijay Valecha, chief investment officer at Century Financial in Dubai.

Energy consultant Kpler estimates that Iranian crude exports could fall by 500,000 bpd on stricter US sanctions, including on shipping moving Iranian oil or on end consumers.

March also saw stronger oil inflow from Saudi Arabia and Iraq, which rose to 1.8 million bpd and 1.5 million bpd respectively, up from 1.5 million and 1.2 million bpd in February, helped by lower official selling prices.

China can replace Iranian barrels with other comparable crude grades, including Saudi, Iraqi and Russian blends, if it has to, according to Noam Raydan, senior fellow at the Washington Institute for Near East Policy.

For the moment, however, “Chinese buyers continue to buy Iranian crude, despite US sanctions,” said Amena Bakr, an AGBI columnist and head of Middle East Energy & Opec+ Insights at Kpler.

Bakr said that tighter US sanctions could drive up shipping costs. “There are early signs that some buyers in China are slightly reluctant to buy products produced by the sanctioned Chinese teapots,” she said.

President Donald Trump’s decision earlier this month to impose tariffs of 145 percent on Chinese goods into the US market has raised tensions between the world’s two largest economies and weighed on oil markets, contributing to a 13 percent drop in crude prices since his April 2 announcement.

The tariff move has clouded China’s economic outlook and raised questions about the pace of global oil demand growth. The International Energy Agency this week cut its 2025 global oil demand growth forecast to 700,000 bpd from a previous estimate of 1 million.

Emma Li, Vortex’s China oil market analyst, said the drop in oil prices is offering some relief to the refining sector “which could support continued demand in the short term”.

“In the medium to long term, however, I’d expect a demand slump starting in the fourth quarter if the tariff war persists,” she said.