China's 'Official' Oil Imports Drop As It Buys More Iranian Crude

China’s crude oil imports are estimated to have declined by 8.81 percent month over month in March to stand at 11.26 million barrels per day (bpd), energy analytics services provider OilX said, noting that its assessment doesn’t show massive crude flows from Iran into China last month.

In recent weeks, various reports have suggested that China has been considerably boosting its crude oil imports from Iran—so much so that the ports in the Shandong province, where most independent refiners are based, are experiencing tanker traffic congestions.  

According to some estimates, China was taking in some 856,000 bpd or even closer to 1 million bpd of Iranian crude oil in March, more than double compared to February.

“There has been a lot of chatter in the market about Iranian crude exports stealthily reaching China. We believe that the magnitude of the flows reported is not aligned with our assessment of Iranian exports and Iranian floating storage decreases,” OilX oil analysts Juan Carlos Rodriguez and Valantis Markogiannakis wrote in a report on Tuesday.  

OilX analysts “believe that the long-term implication of the strategic partnership announced last week between the two countries and the ongoing nuclear talks are far more important,” they added.strategic partnership

OilX thus estimates that Chinese imports moderated to 11.26 million bpd in March, which was still an increase by 14.45 percent over March last year, when China was under lockdown at the start of the pandemic.

In addition, crude flows currently underway to China remain flat for April, according to OilX Research.

The assessment for the March crude flows to China showed that imports from the Middle East, excluding Iran, dropped the most month over month, with the biggest declines seen in imports from Iraq and Saudi Arabia. Imports from the North Sea and Brazil, on the other hand, surged the most, OilX said.

Year over year, China’s crude oil imports increased the most from the United States, Norway, and the UK. Imports from Norway and the UK hit record highs, thanks to increased purchases of crude from the Forties and Johan Sverdrup fields, OilX data showed.