China’s independent refiners are stepping up purchases of Iranian crude held in bonded storage and on tankers idling offshore after Beijing issued a fresh round of import quotas late last month, Bloomberg reported.
Citing people familiar with the matter, the report said the new allowances follow a fourth-quarter slowdown linked to exhausted permits and sanctions-related frictions that curbed arrivals.
The so-called teapot processors in Shandong province dominate China’s intake of discounted Iranian barrels, but overall demand may stay subdued through year-end as weak margins persist, according to analytics firm Vortexa cited by Bloomberg.
Two supertankers that had been waiting off China discharged this week, including the Panama-flagged Ill Gap with about 2 million barrels at Rizhao, the report added.
Iranian crude held in floating storage has climbed to the highest in roughly two and a half years as exports outpaced Chinese buying, shipping tracker Kpler estimates.
Discounts have widened as cargoes accumulate.
Offers for Iran Light this week were around $8–$9 a barrel below ICE Brent, compared with roughly $4 in August, traders told Bloomberg.
The pressure reflects a well-supplied global market and intermittent bottlenecks on Chinese intake tied to quota availability and compliance risks.
In late October, Reuters reported Iranian barrels to China changing hands at the steepest discounts in over a year amid tighter Western sanctions on Iran and Russia and a shortage of teapot import quotas.
China allocates crude import volumes to non-state refiners in tranches. Analysts said the latest allotment gave about 20 teapots some 7–8 million tons combined, enabling refiners to clear on-water inventories and draw from bonded tanks.
But with refinery margins thin and some buyers wary after recent sanctions on firms and facilities accused of handling Iranian oil, industry watchers expect sanctioned crude to continue accumulating on the water into December.
