PetroChina, Sinopec weigh resuming Iran oil buys after U.S. waiver

China State Refiners Weigh Resuming Iranian Oil Imports After U.S. Waiver

China's major state-owned refiners are considering restarting purchases of Iranian crude oil for the first time since 2019, following a sweeping U.S. sanctions waiver issued this week, according to Reuters.reuters

Sinopec and PetroChina are assessing the banking, insurance, and shipping logistics needed to facilitate Iranian oil transactions, three sources from Chinese state oil firms told Reuters. The officials, who spoke on condition of anonymity, said the move follows a 60-day U.S. waiver permitting global buyers to purchase Iranian oil and petrochemicals settled in U.S. dollars.cnbc +1

A Historic Opening

The U.S. Treasury on Monday issued what CNBC described as the most extensive relaxation of oil sanctions against Iran since the 1979 Islamic Revolution. Known as General License X, the waiver authorizes the production, delivery, and sale of Iranian crude, petroleum products, and petrochemicals through August 21, and permits previously sanctioned vessels and entities to engage in transactions.kpler +1

The waiver emerged from a memorandum of understanding signed between the U.S. and Iran on June 18 as part of broader negotiations over Tehran's nuclear program and the reopening of the Strait of Hormuz. Previously, Iran sold its oil — predominantly to China — at discounts of roughly $8 to $10 per barrel below market rates to circumvent sanctions.facebook +2

Tepid Appetite

Despite the diplomatic opening, industry observers expect limited enthusiasm from the state refiners. A second state oil official told Reuters they were skeptical about major purchases, citing weak domestic fuel demand in China. Analysts at Kpler noted that while China should remain the primary destination for Iranian crude, they "do not expect the sanctions waiver to immediately trigger a surge in Chinese buying".reuters +1

Most Asian refiners have already secured crude commitments through August, leaving little room for additional purchases within the 60-day window. Indian, Japanese, and South Korean refiners have shown little appetite, as re-establishing compliance procedures after years away from Iranian trade would take longer than the waiver allows.reuters +2

Teapots Still in the Lead

China's independent refiners, known as "teapots" and clustered mainly in Shandong province, have remained the dominant buyers of Iranian crude throughout the sanctions era, purchasing more than 80% of Iran's shipped oil according to Kpler data. Those refiners are expected to continue as the primary purchasers, though their own demand has softened due to production cuts that began in May, according to Vortexa.hydrocarbonprocessing +1

Iran's National Iranian Oil Company, which maintains marketing teams in Beijing and Shanghai, expects renewed interest from state refiners shortly, one official told Reuters. Should the waiver extend beyond 60 days, analysts anticipate demand could emerge from refiners in India, Japan, South Korea, and the Mediterranean.kpler +1