China sharply increased purchases of Iranian oil in 2021, and in March brought it to a historically record 3.75 million tons, Reuters reports, citing data from Refinitive Oil Research.
Analysts at SVB Energy estimate the supply at 1 million barrels per day based on the movement of Iranian tankers.
This makes Iran the third largest supplier to the PRC after Russia and Saudi Arabia, which, according to official data for January-February, were selling about 1.7 million barrels per day.
Iranian oil goes to Chinese refineries at gigantic discounts – up to $ 4-6 per barrel, market participants polled by Reuters say.
“The recent surge in crude oil exports from Iran to China is contributing to a weakening market, undermining OPEC+ efforts to restrict supply and targeting prices for a third week of decline,” Rystad Energy analysts said.
The deal for discounted oil supplies was part of a giant investment deal that Iran and China signed last weekend, writes The New York Times.
On March 27, in Tehran, Chinese Foreign Minister Wang Yi and Iranian Foreign Minister Mohammad Javad Zarif signed a comprehensive cooperation agreement for a period of 25 years.
As part of the deal, China agreed to invest $ 400 billion in the Iranian economy – an amount almost equivalent to the country’s current GDP ($ 454 billion). Chinese money will go to the extraction of oil and minerals, the development of Iranian industry, agriculture and the construction of transport infrastructure.