The US has temporarily eased sanctions on Iran to reduce supply shortages in the global oil market. At this opportunity, China’s state-owned oil refineries have started discussions on importing large amounts of crude oil from Iran. This information was given in a report by the US media Bloomberg.
This special ‘waiver’ or discount has been given by the US for the next 30 days. Washington’s goal is to solve the oil crisis in the world market caused by the ongoing unrest in the Middle East. According to US administration estimates, the suspension of the embargo could add about 140 million barrels of additional crude oil to the international market. Earlier, the United States had similarly eased some restrictions on Russian oil.
Citing related sources, Bloomberg reported that representatives of China’s major state-owned refineries have begun contact with the National Iranian Oil Company (NIOC). The negotiation process is being conducted with utmost confidentiality through intermediary traders. China is the first among Asian refineries to take advantage of this opportunity.
According to the data, China was the largest buyer of Iranian oil even before the start of the Israel-Iran war. China used to import about 80 percent of Iran’s total oil exports. According to shipping data tracking company Kepler: China bought an average of 13.8 million barrels of Iranian oil per day last year. In addition, about 13.4 percent of China’s total oil imported by sea comes from Iran.
Market analysts believe that if major importing countries like China increase their direct purchases of Iranian oil, the price of crude oil in the global market may come down significantly. This will play a major role in controlling global inflation. But since the concession is only for 30 days, it remains to be seen how successful China will be in ensuring long-term supply.
