China restocks state oil reserves with four million barrels of Iranian crude, despite US sanctions

China has refilled its strategic petroleum reserves with Iranian crude oil, despite US sanctions, trade sources say

Senior Iranian official said the country would continue to improve trade with non-Western buyers, which include China

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Export oil pipelines at a facility on Iran’s Khark Island. Photo: AFP

Published: 1:02pm, 21 Jan 2022

China has offloaded nearly four million barrels of Iranian crude oil into state reserve tanks in the southern port city of Zhanjiang over the past few weeks, a trade source and ship tracking specialist Vortexa Analytics said on Thursday.

The move comes as world powers are locked in tough negotiations with Iran to revive a 2015 nuclear deal that will include the lifting of US sanctions on Iranian oil. The former Trump administration pulled out of the deal and reimposed sanctions.

Iran, which sits on the world’s fourth-largest oil reserves, relies heavily on oil revenue, but sanctions have prevented it from pumping at anywhere near capacity since 2018.

The refilling of China’s strategic petroleum reserves also comes ahead of a plan to release oil from its emergency stockpile in a rare coordination with the United States to help cool global oil prices which hit a seven-year high this week.

China has previously been importing Iranian oil under the radar, with the shipments not reflected in official customs data as buyers fear invoking US sanctions. On Thursday, China’s customs reported the first import of Iranian crude in a year despite ongoing sanctions.