Sanctions have left Iran with limited buyers, allowing China—mainly independent “teapot” refiners—to secure deeply discounted crude.
China, the world’s largest crude
importer, is the main buyer of oil from OPEC producer Iran,
leaving Beijing uniquely exposed to any supply disruption
fromconflict in the Middle East.
Beijing, which is also the biggest buyer of oil from Venezuela
and a top importer of oil from Russia, has used purchases from
the three countries facing various Western sanctions to save
billions of dollars on its import bill in recent years.
HOW MUCH IRANIAN OIL DOES CHINA BUY?
China buys more than 80% of Iran’s shipped oil, data for 2025
from analytics firm Kpler showed. Iranian oil has limited buyers
due to U.S. sanctions aimed at cutting off funding to Tehran’s
nuclear programme.
China purchased on average 1.38 million barrels per day of
Iranian oil last year, according to Kpler. That represented
about 13.4% of the total 10.27 million bpd of oil it imported by
sea.
WHO ARE THE MAIN CHINESE BUYERS OF IRANIAN CRUDE?
Chinese independent refiners known as teapots, clustered
mainly in Shandong province, are the main buyers of Iranian
crude, drawn by its discount to non-sanctioned barrels.
Teapots, which account for roughly a quarter of Chinese refinery
capacity, operate on narrow and sometimes negative margins and
have been squeezed recently by tepid domestic demand for refined
products.
China’s big state oil companies have refrained from buying
Iranian oil since 2018/2019, traders and experts have said.
HOW MUCH CHEAPER IS IRANIAN OIL?
Iranian Light crude has traded at around $8 to $10 a barrel
below ICE Brent on a delivered basis to China since December,
from a discount of about $6 in September, traders said. That
means Chinese refiners save about $8 to $10 a barrel if they buy
Iranian Light rather than non-sanctioned Oman crude, according
to calculations by a trader and Reuters.
Discounts have widened due to ample supply in onshore tanks and floating storage.
Iran has a record amount of oil on the water, equivalent to
around 50 days of output, as China has bought less because of
sanctions and Tehran seeks to protect its supplies from the risk
of U.S. strikes, Kpler said.
ARE U.S. SANCTIONS HAVING AN IMPACT?
Washington reinstated sanctions on Tehran in 2018, and U.S.
President Donald Trump’s administration has imposed several new
rounds of sanctions on Iran’s oil trade since taking office in
January.
Trump’s sanctions have included penalties on three Chinese
teapots, which has curtailed buying from several mid-sized
independents worried about being designated, Reuters reported.
WHAT IS BEIJING’S STANCE ON THE IRAN OIL TRADE?
Beijing rejects unilateral sanctions and defends its trade
with Iran as legitimate.
Iranian oil imported by China is typically labelled by traders
as originating from other countries, such as Malaysia, a major
transshipment hub, and Indonesia.
Chinese customs data has not shown any oil shipped from Iran
since July 2022.
Published on January 13, 2026
