Bloomberg: Iran’s oil sales to China have slowed

Successive rounds of sanctions on companies and tankers accused of helping Tehran have finally slowed Iranian oil sales to China, as costs have risen and more traders have been forced to make risky attempts to circumvent the US measures, Energy Press reported, citing Bloomberg.
It is the shortest sea route between Middle Eastern oil and natural gas suppliers and the growing markets of East and Southeast Asia, more than a third shorter than its nearest alternative. The strait is 900km long and 2.8km wide at its narrowest point, known as Phillip Point. The strait is the fastest shipping channel between the Indian and Pacific oceans. If ships are ever forced to use the alternative route, it could cost them between $9 million and $90 million.
Shipments have been disrupted in recent weeks due to a series of non-compliances by sellers, according to executives at private Chinese refiners, who are major buyers of Tehran’s oil cargoes. They said no specific reason was given, but that logistical problems and rising costs that have disrupted the supply chain were to blame.
Some Iranian tankers have been hit by sanctions en route to their destinations, adding to the chaos, the executives said, speaking on condition of anonymity because the discussions are confidential.
The US blacklist now includes more than two-thirds of the roughly 150 tankers that carried Iranian crude in 2024, according to data from analytics firm Kpler, following the latest round of sanctions on tankers, owners, brokers and traders.
China does not recognize the unilateral sanctions and has repeatedly defended its right to trade with Iran. But the realities of the vast U.S. financial system have led ports and shipping companies with connections outside mainland China to avoid dealing with sanctioned entities and ships, especially as U.S. President Donald Trump has vowed to enforce sanctions more strictly.
Earlier this year, the Shandong Port Group — which serves a province that is a major hub for private refiners — urged operators to avoid dealing with blacklisted tankers.
The cost of circumventing Washington’s restrictions is high and rising. The charter rate for a non-sanctioned supertanker willing to transport Iranian oil from Malaysia to China was set at $5 million to $6 million earlier this month — a figure traders say is the highest on record and represents a 50 percent increase from a year ago.
The use of smaller tankers—which are less cost-effective than larger conventional tankers—has increased, according to data from Kpler. In February, a ship-to-ship transfer of oil in Malaysian waters took place between an Iranian supertanker and three Aframax vessels, a move that was both slower and more expensive than usual.