China’s independent “teapot” refiners are expected to increase purchases of Iranian crude in August as crude stockpiles in Shandong have fallen sharply, Bloomberg reported.
Shandong crude inventories fell to an estimated 360 million barrels by end-July, their lowest level in eight months. July saw a drawdown of around 35 million barrels, the largest monthly decline since Energy Aspects began tracking the data in 2016.
During the Middle East conflict, Chinese independent refiners reduced purchases and relied on existing inventories amid high oil prices and weaker import demand.
The expected increase in Iranian crude purchases comes after millions of barrels of Iranian oil moved through the Strait of Hormuz during the mid-June to early July period, when the U.S. blockade on Iranian exports was lifted.
China’s total crude imports rebounded 22% month-on-month in July to 8.45 million bpd, after reaching a decade low in June.
Analysts expect China’s renewed buying to provide additional support to global oil prices, as the world’s largest crude importer begins replenishing depleted inventories.