Chinese independent refiners have stepped up crude procurements from Iraq and Qatar for October and November delivery, seeking alternatives to falling Iranian supplies as Gulf shipments through the Strait of Hormuz recover, according to trading sources cited by Reuters. Private refiners acquired at least 12 million barrels—and up to 20 million barrels by some estimates—from trading houses including Mercuria, Totsa, and Trafigura.
The delivered cargoes were transacted at premiums between US$12 and US$20 a barrel above ICE Brent. The majority of purchases comprised Iraqi Basra Medium and Heavy grades, with buyers including Hongrun Petrochemical, Qicheng Petrochemical, Qirun Petrochemical, Hualong, and Chambroad Petrochemical. Additionally, Hongrun and Shenchi Petrochemical secured 3 million barrels of Qatar's al-Shaheen grade scheduled for early November arrival.
The shift comes as Chinese imports of Iranian oil dropped nearly 50 percent year-on-year in September to 590,000 barrels per day, according to data from analytics firm Kpler. Kpler noted that Iran recorded zero crude exports in September for the first time since tracking began in 2013, while offshore floating storage outside the blockade zone fell to 45 million barrels.
Concurrently, refining margins for independent operators in Shandong deteriorated significantly. According to consultancy Horizon Insights, refinery utilisation rates dropped to approximately 55 percent by late September, down from nearly 60 percent earlier in the month, with refiners experiencing losses between 250 yuan and 500 yuan per metric ton amid elevated feedstock costs and domestic fuel price caps.
Sources
- The Business Times · 2026-10-07
