China ramped up imports of Venezuelan and Iranian crude oil as domestic refiners brushed off the risk of US sanctions to snap cheap barrels. Chinese refiners imported 324 million barrels from Venezuela and Iran in 2021, analysts said. That represents a 53% increase from 2020 and marks the highest volume since 2018, when China scooped up 352 million barrels from the two countries.
Analysts said Iranian crude oil could be up to 10% cheaper than global prices when delivered to China. These shipments are typically unregistered on official customs data. Tankers carrying these barrels usually turn off their transponders to avoid detection. The oil is also transferred to other vessels in the middle of the sea to conceal them further. Venezuelan and Iranian oil is often rebranded as crude from Oman and Malaysia.
Rising global oil prices and limited import quotas from Beijing for private refiners also make sanctioned barrels more attractive despite the risk of penalties as they are always sold at discounted prices, analysts said. At the same time, the US has relaxed sanction enforcement after President Joe Biden pushed talks to revive a nuclear deal with Iran.
