Iraqi oil is attracting Chinese refineries as demand for Iranian crude declines and floating storage rises.
Iraqi oil is attracting Chinese refineries as demand for Iranian crude declines and floating storage rises.
2026-07-11
Shafaq News – Baghdad
Iraq has benefited from the shift of independent refineries in China towards purchasing crude oil not subject to sanctions, after they resorted in recent weeks to increasing their purchases of crude oil from Iraq, the UAE and Qatar, at a time when Iranian oil sales have slowed and the volume of floating stockpiles at sea has increased with the return of US sanctions.
Traders said that independent Chinese refineries in Shandong province purchased between 16 and 20.5 million barrels of Iraqi, Emirati, and Qatari crude oil, marking the largest purchase of non-sanctioned Middle Eastern oil since the start of the conflict. Shenghong Petrochemical also bought approximately 12 million barrels of Iraqi, Saudi, and Abu Dhabi crude.
Reuters added, based on data from Kpler, Vortexa and UANI, that increased supplies from Iraq and the Gulf states contributed to displacing demand for Iranian crude, especially after the resumption of exports through the Strait of Hormuz, as competing crudes were sold at discounts ranging between $5 and $8 per barrel compared to Brent crude, while discounts for Iranian oil remained at only $2 to $3, making it less attractive to buyers.
Conversely, the volume of Iranian oil stranded at sea increased after exports surged during the temporary truce, but sales slowed as buyers held back. Kpler data showed that approximately 34.5 million barrels of Iranian crude oil transited the Strait of Hormuz between June 14 and July 10, while Vortexa estimated loadings of around 30 million barrels between June 15 and July 6.
Kpler data also indicated that China’s imports of Iranian oil so far in July have reached about 556,000 barrels per day, the lowest level since January 2023, while traders expect Iranian sales to rebound next week if discounts on August and September shipments increase.
shafaq.com
