China refiners weigh Iran crude on US waiver
US sanctions relief may shift China’s oil buying patterns amid rising prices and supply concerns.China’s largest state-controlled refiners are assessing whether to resume purchases of Iranian crude after the United States issued a one-month waiver permitting limited imports, sources familiar with the matter told Bloomberg on Monday.
The move signals a potential shift in global oil trade flows as Washington attempts to ease surging crude prices.
The waiver, issued by the U.S. Treasury’s Office of Foreign Assets Control on March 21, allows transactions involving Iranian oil loaded on vessels until April 19.
The temporary relief marks a rare easing of sanctions that have largely restricted Iran’s oil exports since Washington withdrew from the nuclear deal in 2018 and reimposed penalties on Tehran’s energy sector.
China has remained the largest buyer of Iranian crude in recent years, although purchases have been routed primarily through independent refiners known as “teapots.” These smaller processors have continued to import discounted Iranian barrels using opaque shipping networks, often referred to as “dark fleets,” to bypass sanctions enforcement.Industry data suggests that China imported between 1 million and 1.3 million barrels per day of Iranian crude in 2025, according to estimates from tanker tracking firms such as Vortexa and Kpler.
These volumes accounted for a significant share of Iran’s total oil exports, highlighting Beijing’s central role in sustaining Tehran’s energy revenues despite Western restrictions.The discounted pricing of Iranian crude has been a key driver of demand among teapot refiners.
Analysts estimate that Iranian barrels have traded at discounts of $10 to $15 per barrel compared to Brent crude benchmarks in recent years, reflecting the risks associated with sanctions and shipping practices.In contrast, China’s state-owned oil giants, including Sinopec and PetroChina, have largely avoided direct purchases of Iranian crude to comply with U.S. sanctions and protect their international operations.
These companies maintain global trading networks and financial ties that expose them to potential penalties from Washington.The newly issued waiver could alter this dynamic, although uncertainty remains over its short duration and broader legal implications.
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Sanctions experts note that while the license technically permits transactions involving Iranian oil, other restrictions tied to Iran’s financial and energy sectors remain in place, limiting the scope of engagement.
The waiver also includes an unusual provision allowing imports of Iranian-origin crude into the United States, a move that analysts say underscores the urgency of stabilizing global oil markets. Brent crude prices have risen above $90 per barrel in recent weeks, driven by supply disruptions and geopolitical tensions in key producing regions.
According to the U.S. Energy Information Administration, global oil demand is expected to average 103 million barrels per day in 2026, up from around 101.8 million barrels per day in 2025. This steady growth has tightened supply-demand balances, contributing to upward pressure on prices.Iran, which holds the world’s fourth-largest proven oil reserves, has been seeking to increase exports amid ongoing negotiations over its nuclear program.
The country’s production rose to approximately 3.2 million barrels per day in early 2026, according to secondary sources cited by OPEC, though exports remain constrained by sanctions.Market participants remain cautious about the impact of the waiver.
Analysts say that major state refiners in China may hesitate to engage due to compliance risks and the limited timeframe of the license. The possibility of policy reversal after April 19 further complicates procurement decisions.
Meanwhile, independent refiners are expected to continue dominating purchases of Iranian crude due to their flexibility and tolerance for sanctions-related risks.
These firms have built extensive supply chains that allow them to process sanctioned oil at lower costs, supporting their margins in a competitive domestic market.The broader implications of the waiver extend beyond China. Energy analysts note that any increase in Iranian oil flows could provide temporary relief to global markets, particularly as OPEC+ maintains production discipline and geopolitical tensions persist in regions such as the Middle East and Eastern Europe.Policy uncertainty remains a key factor shaping market behavior.
According to the International Energy Agency, geopolitical risks and sanctions policy will continue to influence oil trade patterns in 2026, with short-term waivers and exemptions adding volatility to supply expectations.
The decision by Chinese state refiners will be closely watched as an indicator of how far major buyers are willing to test the boundaries of U.S. sanctions relief.
Their response could reshape trading dynamics and influence pricing benchmarks in Asia’s crude market.The temporary waiver highlights Washington’s balancing act between enforcing sanctions on Iran and managing domestic and global energy prices.
As the April 19 deadline approaches, market participants are likely to remain cautious, with China’s refiners playing a pivotal role in determining the near-term trajectory of Iranian crude exports.