Chinese independent refineries may see a decline in Iranian crude imports this April, following record levels in March, due to heightened threats of U.S. sanctions. In March, these refineries imported 8.07 million metric tons (approximately 1.91 million barrels per day), marking an 11.9% increase from the previous August and a 19.5% rise compared to February. This surge in imports was aided by improved logistics and competitive pricing against other feedstocks. However, analysts warn that the positive momentum may wane as new U.S. sanctions targeting Iran’s energy sector have been introduced recently.
U.S. Treasury Secretary Scott Bessent convened with global banks and law enforcement agencies to discuss measures aimed at cutting Iran’s oil exports. While some refiners are taking a cautious stance amid these geopolitical risks, many traders anticipate that imports will stabilize at around 7 million metric tons in April, provided that Iranian crude remains competitively priced. The volume of floating storage off Malaysia has decreased significantly as cargoes are being transferred to China. Traders noted that floating storage levels had dropped by 44% from earlier January-February levels, with many shipments reaching independent refiners in Shandong.
Importantly, around 1 million metric tons of March imports were transported via sanctioned vessels, some of which had previously carried Russian crude. As more Iranian cargoes enter the market, prices have softened, and the refining margins have weakened. Refinery sources report that margins have declined, impacting buying interest. Despite these challenges, Iran’s crude output has remained robust, averaging 3.23 million barrels per day in February.
Nevertheless, analysts express concern that intensified sanctions could disrupt future production, predicting a potential decline in output by 500,000 barrels per day by mid-2025 amid high uncertainty.