Why Iran may find it difficult to clear its oil inventories even after sanctions relief
This photo taken on March 26, 2026, shows an oil tanker unloading crude oil at a port in Yantai in China’s eastern Shandong province.
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According to analysts, Iran will face difficulties in clearing its oil stocks even after restrictions on energy imports are lifted; Because Iran’s biggest customer is fine-tuning its energy strategy, oil from other suppliers is flooding the market, analysts say.
China, the world’s top crude oil importer, has not been keen on buying Iranian oil, even though it has traditionally been the country’s main buyer. “The Chinese actually don’t show any desire to buy a lot of oil from anyone,” Fereidun Fesharaki, chairman emeritus of FGE NexantECA, told CNBC’s “Squawk Box Asia.” he said.
China’s crude imports have declined since the start of the Iran war in late February, weighing on oil demand. It fell 29% year-on-year to 7.82 million barrels per day in May, the lowest level since February 2018, according to Wind Information.
China’s crude oil imports from Iran decreased by more than half in June compared to the previous month, falling to approximately 654,000 barrels per day. Bloomberg reported.
The Middle East conflict has “sharpened China’s strategic focus and given renewed impetus to its green transition efforts,” according to one report. report by the Stockholm-based Institute for Security and Development Policy.
The research organization said Chinese Premier Li Qiang reiterated the need to increase the expansion of non-fossil energy and build a new energy system, while also encouraging innovation and faster reforms.
Meanwhile, oil supplies are also expected to increase after the oil cartel OPEC+ agreed to add 188,000 barrels per day to its August production target.
“The increase is part of the group’s plan to finish reversing production curbs it made several years ago and means they have added 940,000 barrels per day to quotas since the start of the war,” according to a report by United Overseas Bank.
“The supply increase is real,” Tiago Lacerda, market analyst at brokerage firm Axi, said in an email to CNBC. He added that since the US lifted the naval blockade, there has been a sharp increase in shipping as Iran has shipped more than 40 million barrels of oil, while Russia’s exports have also risen to record levels.
However, the possibility of disruption of oil flows through the Strait of Hormuz cannot be completely ruled out, which could complicate energy supply calculations.
Fesharaki stated that Iran has clearly stated that the current “free” passage in the Strait of Hormuz is valid for only 60 days, and then they will start to apply a gradual passage fee. “If you are my friend, you will pay less. If you are not my friend, you will pay more. If I don’t like you, maybe I won’t even let you pass your oil.”
— CNBC’s Anniek Bao contributed to the story.
