China has ramped up its imports of Iranian oil, using various schemes to bypass strict US sanctions. Data indicates record supply levels and traditional supply routes with swapped documentation.
Iranian Oil Imports into China
According to data from Kpler, China's imports of Iranian oil nearly doubled, reaching 17.8 million barrels per day in 2024 compared to 2022. In the first five months of the current year, China maintained imports of 6.8 million barrels per day, the same as last year.
Methods of Sanction Evasion
Independent Chinese refineries, known as 'teapots,' are becoming the primary buyers of Iranian oil, avoiding major state-owned companies. This scheme includes shipping oil that can purportedly no longer be traced back to Iran. Bridget Diakun from Lloyd’s List Intelligence noted that tankers are spoofing their locations, indicating activity in this direction.
Financial Aspects of Trade
Chinese buyers are using renminbi to pay for oil, allowing them to avoid involvement in the dollar-based SWIFT payment system. Analysts pointed out that in 2023, the price of Iranian oil was $6-7 lower than similar grades without sanctions, making it attractive to 'teapots.'
Despite pressure from the US, the flow of Iranian oil into China continues to grow. This situation is expected to persist, regardless of uncertainties in political negotiations.
