Independent Chinese refineries ramp up Basra crude purchases to offset drop in Iranian supplies

Independent Chinese refineries have stepped up purchases of Iraqi oil, particularly Basra medium and heavy grades, in an attempt to offset a decline in Iranian supplies, while oil exports from Gulf producers via the Strait of Hormuz recover.

Traders said the Chinese refineries bought at least 12 million barrels of Iraqi and Qatari crude for delivery in October/November, while one trader estimated total purchases at between 15 and 20 million barrels.

Traders indicated that most purchases were of Basra medium and heavy grades, which they described as among the cheapest crude available in the Middle East. The list of buyers included a number of independent Chinese refineries, among them Hongrun Petrochemicals, Chicheng Petrochemicals, Kiron Petrochemicals, Hualong and Chambrud Petrochemicals.

Traders said Iraqi oil has become a new benchmark for independent refineries in China, thanks to abundant supplies and speedy delivery, as those refineries seek alternatives to Iranian crude.

According to data from Kpler, China's imports of Iranian oil fell to about 590,000 barrels per day in September, down nearly half year‑on‑year, the lowest level since January 2023.

The volume of Iranian crude stored on tankers outside the embargo area fell to 45 million barrels, compared with about 100 million barrels in late July. Kpler data showed that Iran did not export any crude during September for the first time since the firm began tracking Iranian oil flows in 2013.