China's Strategic Iranian Oil Purchases Amid U.S. Sanctions

China, the world's largest crude importer, heavily relies on Iranian oil, comprising 13.6% of its imports, making it vulnerable to Middle Eastern conflicts. Despite U.S. sanctions, Chinese teapots favor Iranian oil due to its discounts. Beijing defends its trade despite customs data suggesting otherwise.

China, the globe's top oil buyer, is increasingly reliant on Iranian oil, which makes up 13.6% of its total imports, underscoring its vulnerability to Middle Eastern instability. The nation has strategically engaged in buying oil from Iran, Venezuela, and Russia, all facing Western sanctions, to significantly cut its import costs.

Iranian oil, hampered by U.S. sanctions designed to choke Tehran's nuclear funding, sees 90% of its shipments heading to China. Data reveals that in the first half of this year, China averaged 1.38 million barrels per day, a slight dip from the previous year's 1.48 million bpd.

Chinese teapots, independent refineries concentrated in Shandong, are primary buyers, lured by cost discounts. These discounts, reaching $7-8 compared to other Middle Eastern oils, persist despite Washington's extensive sanctions and threats. Beijing maintains its trade legitimacy, with oil exports often mislabelled as Malaysian by traders, though customs records don't align.

(With inputs from agencies.)