Unwanted Venezuelan and Iranian crude oil is piling up across tankers off key Asian ports, as China’s crackdown on private refiners has blunted purchases of these grades. Ship-tracking data showed that 62 million barrels of crude oil were on board vessels off Singapore, Malaysia, and China last week. Venezuelan crude and Iran’s heavier grade, commonly traded as bitumen blend, are among the barrels held.
The ship-tracking data identified millions of barrels of Iranian crude and condensate in tankers that act as floating storage. A total of 29 crude-laden tankers were floating off China, the data showed, of which around six were believed to be carrying Iranian and Venezuelan crude.
Market sources said these vessels are carrying distressed cargoes struggling to attract buyers outside China. They said that the situation for these barrels would continue to worsen unless China eased the clampdown on independent refiners or the US lifted sanctions on Iran, both were unlikely to happen soon. China cut oil import quotas for some refiners following probes on tax violations and environmental compliance. Beijing also introduced a new tax on some refinery feedstocks, including bitumen blend.
