Tankers full of Iranian oil are reportedly causing a traffic jam at ports in China’s Shandong, as other countries are reluctant to snatch it up, wary of US sanctions.
Congestion at one of China’s major refinery hubs was reportedly caused by soaring exports of crude from the Persian Gulf nation, which are expected to grow further this month.
Iranian oil is currently trading at a heavy discount under the US economic penalties introduced against Tehran in 2018. In China, it is commonly sold up to five dollars per barrel cheaper against benchmark Brent crude, according to traders, as quoted by Bloomberg. The discount reportedly encourages local companies to stock up amid rising global prices.
Chinese purchases of Iran’s oil are expected to reach 856,000 barrels per day in March, marking a monthly growth of 129 percent, the agency reports citing Kevin Wright, a Singapore-based analyst with Kpler.
“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,” Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies, told the media.
Washington has been piling up sanctions against Tehran since former US President Donald Trump initiated a withdrawal from the nuclear deal signed under the Obama administration. Trump’s decisions came as campaign of ‘maximum pressure’ against the Islamic Republic aimed at forcing it to give up its nuclear ambitions.