Chinese refiners eye Iran oil under temporary US waiver

China’s state-owned refiners are reviewing potential purchases of Iranian crude after Washington allowed limited sales of cargoes already loaded on tankers to ease supply pressures from the Middle East conflict, according to Bloomberg.

The move could marginally expand Iran’s customer base and ease global oil prices, but entrenched sanctions, payment barriers and shipping risks mean any shift in trade flows is likely to be limited in the near term.

Intermediaries and officials from National Iranian Oil Co. have quietly approached Asian buyers, including Chinese refiners, to gauge interest, according to market participants familiar with the discussions.

“Iranian oil flows are unlikely to shift materially in the near term,” said Muyu Xu, a senior crude analyst at Kpler in Singapore, citing ongoing concerns over payments, logistics and reputational exposure.

Iran was previously a major supplier to key Asian markets such as South Korea and Japan before tighter US sanctions curtailed trade. China remains Tehran’s largest buyer, although imports are typically handled by smaller independent refiners rather than major state firms wary of sanctions exposure.

Bloomberg also reports that China Petroleum and Chemical Corp, known as Sinopec, said it would continue to avoid Iranian crude. Vice Chairman Zhao Dong said limited cargo availability and the one-month delivery window linked to the waiver could create legal risks once it expires.

The US Treasury waiver, which covers seaborne Iranian crude for one month, follows similar steps to facilitate access to Russian oil as Washington seeks to contain global price rises amid tight supply.

While the waiver in theory broadens the pool of potential buyers, refiners in China and elsewhere are assessing how transactions could be structured while broader restrictions remain in place, including limits on Iran’s access to the international financial system. Securing compliant shipping capacity is also a key constraint.

Shipowners considering entry into the trade are waiting for further clarity and remain cautious about hidden sanctions risks linked to intermediaries, said Karnan Thirupathy, a partner at Kennedys Law.

“There’s a lot of uncertainty over the trade, and also over what will happen after April 19 if the transaction isn’t completed,” Thirupathy said.

Even experienced traders in sanctioned oil markets are closely reviewing the waiver’s terms to avoid future penalties. Without clearer guidance, the current group of buyers for Iranian seaborne crude is unlikely to change, market participants said.

Prices for Iranian crude sold into China have already increased. Iranian Light has recently been offered at a slight premium to ICE Brent, compared with discounts of more than $10 a barrel a month earlier.