Iran further increases its oil prices for Chinese refiners: Report

A report by Bloomberg published on Friday showed that private refiners in China, known in the industry as teapots, had bought Iranian Light crude for December arrival at a discount of $2 to $3 a barrel against the ICE Brent benchmark.

The report said the discounts were the smallest reported this year, adding that there have been fewer cargo offers over the past weeks while delays have also affected the supply of oil from Iran to China in recent months.

Iran has been offering major discounts to teapots in China in recent years to go around US sanctions that restrict the country’s supply to larger processors linked to the Chinese government.

However, reports have suggested that those discounts have been reduced amid tighter supplies caused by regional tensions in the West Asia region as well as repair programs at Iran’s oil export terminals.

Other reports have suggested that Iran is using more oil domestically to generate electricity amid a cold snap that has pushed up demand for natural gas.

Bloomberg said that a decision last month by the US government to add more Iran-linked tankers to its list of sanctions had also contributed to higher prices for Chinese refiners.

It quoted the data intelligence firm Kpler as saying in a note to clients on Thursday that teapots, which account for about a quarter of China’s crude processing, will do their best to secure more Iranian oil supplies despite a promise by US president-elect Donald Trump to increase pressure on Iran.