Iranian oil offers to Chinese buyers fall as US blockade bites, sources say

Offers of Iranian crude to Chinese buyers have declined and prices have jumped this week as the U.S. blockade has cut Tehran's shipments, according to trade sources, with the threat of more sanctions from Washington looming.

The number of offers for Iranian oil cargoes to China for September and October delivery has declined from July and August cargoes, four trade sources familiar with the matter said. The offers have declined as barrels already in ships on the water have been sold, they said.

Three of the trade sources said some Iranian crude, typically sold at discounts, was being offered at premiums to ICE Brent futures, with one source citing a premium of about $2 a barrel. That was an abrupt shift as cargoes of Iranian Light were being offered earlier this week at a discount of around $3 a barrel, the same as a month earlier.

Iranian crude held in floating storage outside the U.S. blockade zone has fallen to about 80 million barrels from about 105 million barrels before the blockade was reinstated, Kpler data showed.

Two of the sources estimated that only about 30 million barrels of Iranian crude remained in Asian waters, half of the usual levels.

Kpler Senior Crude Oil Analyst Muyu Xu estimated there are 40 million barrels of Iranian oil on ships in Malaysian waters east of Singapore, though most of that has been promised to buyers.

"This suggests buyers could face virtually no new Iranian supplies available for late-September delivery onwards since no laden Iranian tankers have so far managed to ‌break through ⁠the US blockade," she wrote in a Friday LinkedIn post.

Reuters