Chinese independent refiners turn to Iraqi oil for November deliveries
Due to the US blockade on Iran and high costs of Russian oil, Chinese independent refiners have started purchasing Iraq's Basrah crude for emergency supply purposes.
Due to the US blockade on Iran and high prices of Russian oil, Chinese independent refiners have turned to Iraq's Basrah crude for November delivery. This move reflects an effort to secure emergency supply rather than a strong demand recovery.
The Iranian blockade and the status of tankers
The US blockade aimed at pressuring Tehran has disrupted shipments from Iran, the largest supplier. At least 50 tankers, mostly carrying Iranian crude, remain stranded off the coasts.
Competition and costs in Russian oil
State-controlled rivals taking up the vast majority of Russian crude have driven up costs for independent processors. This situation has made it difficult for refiners to access Russian oil.
The appeal and prices of Basrah oil
According to sources close to the matter, refiners purchased Iraq's Basrah crudes for November deliveries at premiums reaching up to $18 a barrel over ICE Brent prices. Basrah oil is currently cheaper than Russia's ESPO oil.
Stock depletion risk and expert assessments
Muyu Xu, a senior oil analyst at Kpler, stated that some refiners in the Shandong region face the threat of inventory depletion as early as the end of this month.