Iran's floating oil supplies are increasing after Tehran boosted exports during the temporary peace agreement with the United States. However, sales have slowed as China's independent refiners have shifted purchases to cheaper crude from Iraq, the UAE, Qatar, Saudi Arabia, and Abu Dhabi, where cargoes are being offered at steeper discounts.
According to the Reuters, Iranian Light crude is currently trading at a narrower discount of $2–3 per barrel below ICE Brent, compared with $5–8 per barrel discounts for competing Middle Eastern grades, making Iranian crude less competitive. Sales were also disrupted during Iran's official mourning period following the death of Supreme Leader.
The reimposition of U.S. sanctions this week could leave Iran with more unsold cargoes as shipments continue to arrive in Asia. Between June 15 and July 6, Iran loaded about 30 million barrels of crude (around 1.35 million bpd), while 52 tankers carrying approximately 62 million barrels of crude and petroleum products have departed since the ceasefire began.
Despite the export surge, China's imports of Iranian crude have fallen to about 556,000 bpd so far this month, the lowest level since January 2023, reflecting weaker demand from Chinese independent refiners. Traders expect Iranian sellers to increase discounts to $4–5 per barrel for August–September cargoes to stimulate sales.