Iran’s Disappearing Oil Is Becoming Everyone’s Problem
Iranian oil is disappearing from the market just as its biggest buyer returns for more. China’s recovering crude demand is colliding with the loss of a supplier that sustained its independent refiners through the crisis, forcing them to compete for increasingly expensive alternatives. The consequences reach beyond China: every replacement barrel tightens supplies for other buyers, while Tehran…
Iran's oil supply is dwindling, causing problems for its largest buyer, China, and other nations. As China's demand for Iranian crude rebounds, it faces a shortage of its main supplier, which has led to increased competition for expensive alternatives. The situation extends beyond China, impacting other countries as well. China relies heavily on Iranian oil, with the country receiving an average of 1.4 million barrels per day from 2025.
However, the US blockade on the Strait of Hormuz has halted Iranian oil shipments, forcing the Chinese oil market to seek alternatives. Iran has accumulated a significant floating stockpile of oil, which has allowed China to continue importing 1.37 million barrels of Iranian oil per day despite the supply disruptions. Nonetheless, the buffer is decreasing, and the floating storage has fallen to 128 million barrels by mid-July, down from 106 million barrels in mid-June.
As the buffer vanishes, China has turned to other oil sources, such as Russia and South America, with Chinese independent refiners reportedly seeking supplies from these regions. Meanwhile, Iran's production capacity is no longer achievable, with onshore storage reaching 60% full, storing around 70 million barrels. Iran will have to confront the choice of cutting production as the floating storage continues to deplete.
Written by urgent.news from OilPrice's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
