Iranian oil supplies to China fall due to US restrictions and declining demand

According to Vortexa, crude oil and condensate deliveries from Iran to China totaled just over 1.1 million barrels per day in May, approximately 20% lower than it was a year earlier. Further ship tracking data collection may alter these figures.

Bloomberg reports that the US and its allies are seeking to reduce Iran's oil revenues in response to its nuclear program. Emma Lee, an analyst at Vortexa, said tighter restrictions are creating problems in the energy supply chain and raising concerns about its stability. She added China is experiencing a decline in demand for crude, primarily due to delays in seasonal maintenance at oil refineries, which is expected to continue until July.

China's independent refineries are the largest buyers of Iranian oil, according to Bloomberg. Discounts offered by Iranian suppliers help Chinese private companies compensate for low profitability. However, these plants are currently operating at near-record low capacity. They also accumulated more raw material stocks than usual at the beginning of the year, Vortexa says. This led to a decline in purchasing demand in May.