China has quietly ramped up its oil imports from Iran, using secret shipping tricks and small independent refineries to evade strict US sanctions, according to data provided by CNBC.
Although the sanctions aim to cut Tehran's funding, oil continues to flow. China has nearly doubled its crude oil imports from Iran to 17.8 million barrels per day in 2024 compared to 2022, based on data from ship tracking company Kpler.
In just the first five months of this year, oil imports stabilized at 6.8 million barrels per day, unchanged from the same period in 2024.
Since July 2022, Chinese customs data shows that no crude oil has arrived from Iran. But that is just a fabricated number. Oil is still being imported, just through underground operations.
Most oil arriving at the coast no longer appears to originate from Iran. Oil tankers transport across multiple oceans, change ships mid-route, hide location signals, and erase paperwork trails.
Small refineries, state-run, stay away
The buyers are not large companies. Small independent refineries in China, known as 'teapots,' are leading in this. State-owned companies and large private refineries still avoid sanctioned Iranian oil, but the 'teapots' do import it.
They buy oil on a 'delivered to your door' basis, meaning the seller, Iran, is responsible for transportation. This allows Chinese refineries to avoid maritime sanctions. Expert Brian Leisen at RBC Capital Markets stated that the physical market has not seen any long-term impact from Iranian oil flows.
The 'teapots' don't even need to ask where the oil is from. When oil arrives in China, it has been transferred from one ship to another, often in the Strait of Malacca or the Middle Eastern Gulf, along with changing the original paperwork.
Punit Oza, chairman of the Shipbrokers Institute, explained that when goods are continuously transferred between ships and paperwork is changed, it becomes very difficult to trace the origin. Therefore, China's data does not reflect this, as technically the oil does not come directly from Iran.
Not only hiding paperwork, oil tankers also falsify GPS location data, send false location signals, and create disguises to move to other places. This makes it even more difficult to determine the true origin of the goods.
Expert Bridget Diakun from Lloyd’s List Intelligence noted that the waters off the east coast of the Malay Peninsula are a 'hot spot' for Iranian oil as many ships spoof their location here.
China pays in yuan, avoiding the dollar payment system
Regarding payments, Chinese buyers use the yuan instead of the US dollar to pay for oil. These transactions are made through small banks that are on the US sanctions list, keeping China's major banks out of trouble.
Not using dollars means not participating in the SWIFT system, the global payment network dominated by dollars. This is the goal. Brian Leisen said that without exposure to dollars, being excluded from the SWIFT system does not pose a significant obstacle to the continued oil flow.
Iranian oil is priced lower than its competitors. In 2023, light Iranian oil was sold at a discount of 6 to 7 USD per barrel compared to UAE's Upper Zakum oil, which is of similar quality but not sanctioned. With a price of about 64 USD per barrel, this discount attracts 'teapots' that are not concerned about the oil's origin, just the low price.
Muyu Xu, an oil analyst at Kpler, stated that light Iranian oil is traded approximately 6 to 7 USD lower.
Despite significant pressure from Washington, money continues to flow into Tehran. Iran earned about 70 billion USD from oil and gas exports in 2023, according to US congressional data. Most of that flows through China. The US Energy Information Administration stated in May that about 90% of Iran's oil exports still go to China.
Even if US President Donald Trump returns to the White House, the attitude has changed. Earlier this week, he posted on social media Truth Social that China may continue to buy Iranian oil. This caused oil markets to fluctuate, with US oil prices dropping by 6%. Later, a White House official told CNBC that Trump's remarks do not mean that sanctions will be lifted.
However, Muyu Xu believes that statement is a 'calculated negotiation.' This could be an effort for Iran to respect the ceasefire and restart nuclear negotiations, while also sending a goodwill signal to China ahead of trade talks. She said it's still too early to say whether this is a sign that sanctions on Iran might be lifted.
But no one is waiting. No oil traders, no 'teapots,' and not even Iran. Brian Leisen noted that while there is no clear conclusion about Iran after the ceasefire, the physical oil market is expected to continue normal oil exports.
Speaking at the NATO conference, Trump also stated that Iran would need money to 'rebuild its country.' This raises questions about whether the 'maximum pressure' campaign is gradually being overlooked, even though sanctions remain on paper.
Source: https://tintucbitcoin.com/trung-quoc-ne-lenh-cam-dau-iran/
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