China Turns to Iraq for Oil Supplies!

While the US blockade is making gasoline supplies to China more difficult, independent Chinese refineries are losing access to Russian oil. Increased purchases of Russian crude by state-owned refineries have intensified competition, prompting independent processors to turn to Iraqi crude oil as an alternative. According to reports, some Chinese refiners have purchased Basra crude from Iraq for November delivery at premiums of up to $18 per barrel over the ICE Brent price. These purchases are seen less as a sign of strong growth in Chinese gasoline demand and more as an effort to secure urgent supplies of crude.

At least 50 tankers, mainly carrying Iranian crude oil, are reportedly stranded off Iran’s coast due to the ongoing US blockade against Tehran. Meanwhile, Chinese state-owned refineries are purchasing larger volumes of Russian crude, increasing raw material costs for independent refiners. Kpler analyst Muyu Xu said some refineries in Shandong could run out of stock by the end of the month. As a result, refiners are seeking alternative sources to avoid suspending operations. Improved gasoline flows from the Middle East are also making Iraqi crude more accessible to Chinese buyers.