Imports of Iranian crude have been flowing into the port and refining city of Dalian since late last year, tanker tracking firms and trading sources said, helping sustain the country's purchases of the oil at near record levels.
The shift has happened as demand for Iranian crude from small buyers in the independent refining hub of Shandong province has waned in the face of deteriorating refining margins, squeezed by higher crude prices but weaker-than-expected fuel demand, traders said. They have been Iran's main buyers in China since 2019.
Vortexa, a consultancy that tracks tanker flows, said 23 cargoes, or a total of 45 million barrels, of Iranian oil was discharged at Dalian between October 2023 and June 2024.
It said this included 28 million barrels discharged at Changxing island, about 85 km (53 miles) northwest of central Dalian.
Another consultancy, Kpler, estimated China imported 34 million barrels into Dalian during the same period.
The figures equate to 124,000-164,000 barrels per day, roughly 13% of China's total Iranian oil imports during the first half of 2024.
Analysts estimate China imported 1.2-1.4 million bpd of Iranian crude during the period. Vortexa said the imports hit a record 1.52 million bpd last October.
There are four possible destinations for the Dalian shipments - Hengli Petrochemical's 400,000-bpd refinery complex and 44 million-barrel storage farm, two refineries run by state-giant PetroChina.
Before last October, Dalian, which accounts for 6% of China's crude processing capacity, had received only sporadic Iranian oil shipments in recent years, according to Vortexa and Kpler.
Iranian oil is attractive to refiners due to steep discounts relative to similar Middle Eastern grades, such as Oman or Murban, or Russia's main export grade ESPO Blend.
In related News, the analysts of the Standard Chartered Institute in an unconfirmed report estimated the Iranian oil export to China in June 2024 at about 1.450 million barrels per day (bpd). The analysts have claimed that Malaysian waters have become a route for the transfer of Iranian oil from ship to ship.
According to the Standard Chartered, the latest China customs import data showed crude oil imports from Malaysia clocked in at 1.456 million barrels per day (bpd), a lot more than the country produces.