Reuters reported, citing six trade sources, that the Iranian regime is selling its oil to small Chinese refineries with bigger discounts.
On Tuesday, September 16, Reuters reported that Iran’s oil stockpiles in China had reached a new record, while import quota restrictions toward the end of the year had tightened. As a result, the Iranian regime has been offering its oil at deeper discounts than before.
According to the report, this week the discount for Iranian light crude for October cargoes reached more than $6 per barrel compared to the Brent benchmark. Two weeks ago, the discount was about $5, and in March around $3. Record oil inventories in Shandong have reduced profit margins for small refineries, while the shortage of government-issued import quotas has further limited their purchases.
A source familiar with Iran’s oil trade told Reuters: “Discounts for Iranian oil in China have widened on record stock levels at a major refining hub and as a shortage of import quotas towards year-end hindered buying by independent processors.”
Based on tanker tracking data, imports of Iranian oil at Chinese ports have reached their highest level since before Donald Trump’s return to the White House in early 2025 and the revival of the so-called “maximum pressure” campaign.
Data from the commodities analytics firm Kpler shows that the volume of Iranian oil discharged at Chinese ports last month surged significantly, indicating that the world’s largest oil importer has not been affected by U.S. efforts to curb Tehran’s exports.
The increase was so significant that Iran’s unsold oil stocks floating in Asian seas—rising in recent months—fell by half in just one month.
According to Kpler, discharges of Iranian crude at Chinese ports in August reached 1.68 million barrels per day, a 23% increase compared to July.
Reuters reported on September 16, citing trade sources, that while Western sanctions aimed at halting Iran’s uranium enrichment program are targeting oil exports, declining demand from independent refiners in Shandong province—known as “teapots”—is adding pressure on the Iranian regime to maintain revenues from oil sales.
According to Kpler, these sanctions have reduced shipments to a key Chinese port. On August 21, the U.S. sanctioned Hai Dongjiako port in Qingdao, which previously received 130,000 to 200,000 barrels per day of Iranian oil.
This is the sixth Chinese terminal blacklisted by Washington for receiving Iranian oil. Three informed sources said operations at the terminal ceased shortly after the sanctions were imposed.
In recent years, China has purchased over 90% of Iran’s oil exports. Data from Vortexa shows that between January and August, Chinese imports averaged 1.43 million barrels per day, reflecting a 12% increase compared to last year.
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To evade sanctions, traders usually disguise Iranian oil as Malaysian oil, transferring cargoes ship-to-ship in waters near Malaysia.
Beijing has described its oil trade with Tehran as consistent with international law and labeled unilateral U.S. sanctions as illegitimate.
According to a senior Kpler analyst, crude imports at Dongjiako port fell by 65% this month (September). However, Qingdao Xiehua, another terminal at the same port, has not yet been sanctioned.
Three trade sources told Reuters that if vessels are not sanctioned, Iranian cargoes are redirected to nearby terminals.
Kpler’s forecast data shows that Iranian oil imports at Huangdao—another discharge hub in Qingdao—will reach 229,000 barrels per day in September, double that of August.
According to Vortexa Analytics, onshore commercial crude inventories in Shandong province reached a record 293 million barrels by August 22, an increase of 20 million barrels since early July, with a large portion consisting of Iranian oil.
