Chinese Independent Refiners Shift to Iraqi Crude After US Blockade
Independent Chinese refiners are increasing Iraqi crude oil purchases after a United States blockade restricted Iranian supplies and Russian oil became too expensive.
Independent Chinese refiners, including the smaller teapot processors in Shandong province, are increasing their procurement of Iraqi Basrah Heavy and Basrah Medium crude oil for November delivery. This shift in sourcing follows a blockade implemented by the Federal government of the United States that restricted oil supplies from Iran, which had previously served as a primary source for these private processors.
Market conditions have further limited options for independent refiners, as competition from state-owned Chinese companies has made Russian oil barrels cost-prohibitive. To secure immediate supplies, traders report that these refiners are paying premiums of up to $18 per barrel over ICE Brent.
Industry analysts note that the surge in Iraqi crude purchases is a reaction to the sudden loss of Iranian supply rather than a sign of a broad recovery in overall Chinese oil demand.
