Iranian shipments to the province of Shandong, which accounts for a quarter of China’s refining capacity, have surged so much this month they’re causing congestion at ports and filling up storage tanks.
The surge in China’s crude imports from Iran comes as many of other Iranian oil buyers are still waiting for the US President Joe Biden to remove sanctions on the Islamic Republic.
“The surge is related to lower costs but also, politically, to a sense that this might be an interim period between the outgoing administration and the Biden administration figuring out its position on Iran,” said Michal Meidan, Director of the China Energy Program at the Oxford Institute for Energy Studies.
Iranian oil production and exports have been both increasing over the past few months despite the US sanctions and the Iranian Oil Ministry has announced its readiness for boosting the country’s crude oil output to the pre-sanction levels in case of the US rejoining the Joint Comprehensive Plan of Action (JCPOA).
Back in January, the data from SVB International and two other firms indicated that Iranian oil exports were climbing in January after a boost in the fourth quarter despite US sanctions.
Iran’s Deputy Oil Minister Amir Hossein Zamaninia had said earlier that the country started boosting its oil production and would be able to reach pre-sanction levels within two months.
Iranian oil won’t create any surplus in the oil market and the market will be able to accommodate the country’s maximum oil output of up to four million barrels a day, Bloomberg quoted Zamaninia as saying on the sidelines of the Iran Oil Show in Tehran in late January.
