Who Buys Iranian Oil? Iran’s Crude Customers and Trade Flows Explained

Who buys Iranian oil? China's independent refiners

Who buys Iranian oil? In recent years the answer has been, above all, China. According to the US Energy Information Administration (EIA), China took nearly 90% of Iran's crude oil and condensate exports in 2023. The other destinations that year were Syria, the United Arab Emirates and Venezuela ^[1].

The scale of Iranian oil to China is large. In 2025 China imported an average of about 1.38 million barrels a day (mb/d) of Iranian oil, according to calculations by a trader and Reuters cited by Hydrocarbon Processing. That was more than 80% of Iran's shipped oil and about 13.4% of China's seaborne crude imports of 10.27 mb/d ^[2]. Iranian crude deliveries to China peaked at close to 1.9 mb/d in October 2024, according to Kpler data ^[3].

The main buyers are China's independent refiners, often called "teapots", most of them in Shandong province. They account for roughly a quarter of China's refining capacity and often work on narrow or even negative margins. China's large state oil companies have avoided Iranian crude since around 2018–19 ^[2]. Chinese customs data have shown no oil imports from Iran since July 2022, so trade volumes are estimated from tanker-tracking and trade data. Beijing rejects unilateral sanctions and describes its trade with Iran as legitimate ^[2].

Who bought Iranian oil before 2018?

Iran's customer base used to be much broader. After the 2016 nuclear agreement lifted restrictions, Iranian crude exports roughly doubled to about 2.2–2.4 mb/d ^[4]. From January 2016, buyers in Asia-Pacific took about 68% of Iran's crude exports and Europe about 30% ^[5].

The main customers in that period included:

• Türkiye and Europe: In 2017 Türkiye's main refiner bought around 214,000 b/d. Italy took about 167,000 b/d, France about 116,000 b/d, Greece about 93,000 b/d and Spain 87,000 b/d ^[5].
• India: India imported 518,000 b/d of Iranian crude in 2018. At its peak, Iranian oil made up 11.5% of India's crude imports ^[6].
• China: China bought about 658,000 b/d in January–September 2018 ^[7].
• South Korea and Japan: South Korea bought about 300,000 b/d of Iranian condensate in 2017, and Japan about 160,000 b/d of crude in January–September 2018 ^[7].
• Taiwan: about 16,000 b/d in January–August 2018 ^[7].

How sanctions narrowed Iran's customer list

The United States announced in May 2018 that it would reimpose sanctions ^[5]. Its oil-sector sanctions took effect on 4 November 2018 ^[4]. In mid-2018, refiners in Spain, Italy and France indicated that August-loading cargoes would probably be their last purchases of Iranian crude ^[4].

In November 2018 Washington granted temporary waivers to eight buyers: China, India, South Korea, Japan, Türkiye, Italy, Greece and Taiwan. The allowances included 360,000 b/d for China, up to 300,000 b/d for India and up to 200,000 b/d of condensate for South Korea. Türkiye's waiver covered about 60,000 b/d, well below its 2017 purchases ^[7]. India's imports fell to 268,000 b/d in January–May 2019 and then stopped ^[6]. Iran's crude and condensate exports averaged just 0.4 mb/d in 2020 ^[1].

When exports recovered, to nearly 1.4 mb/d by 2023, the customer list was far shorter ^[1]. Syria was another regular buyer. Iran supplied about 80,000 b/d to Syria's Banias refinery in 2023 and about 50,000 b/d in 2024. That supply appears to have ended after the fall of the previous government in Damascus in December 2024 ^[8].

How has Iranian oil been priced?

Iranian crude has generally sold to China at a discount to benchmark grades, and the size of that discount has changed with supply:

• Mid-2025: Iranian Light traded at $3.30–3.50 a barrel below ICE Brent for July delivery, compared with about $2.50 for June ^[9].
• Late 2025: From December the discount widened to about $8–10 a barrel on a delivered basis, from about $6 in September. The report linked the wider discount to ample supply in onshore tanks and floating storage ^[2].
• April 2026: After the conflict began, independent refiners paid premiums of $1.50–2 a barrel over ICE Brent, compared with a $10 discount before the conflict ^[10].
• July 2026: Iranian Light traded at discounts of $2–3 a barrel, while other Middle Eastern cargoes sold at discounts of $5–8 for August–September delivery. One trader said Iranian oil had become the most expensive barrel on offer ^[11].

How did Iranian oil flows to China change in 2026?

Trade patterns shifted several times during the year.

• March–April: The United States issued a 30-day waiver, expiring on 19 April, that allowed Iranian oil already in transit to be sold. Under it, India received two cargoes of about 2 million barrels each, its first Iranian crude since 2019 ^[6].
• From 13 April: The United States began a naval blockade of Iranian ports ^[12].
• June–July: Exports rose after a ceasefire in mid-June. However, other Middle Eastern producers also resumed exports when the Strait of Hormuz reopened in late June, which reduced demand for Iranian barrels. Shandong refiners bought 16–20.5 million barrels of Qatari, Iraqi and UAE crude in a few weeks ^[11].
• July–August: Iranian crude reaching China via Hormuz averaged about 530,000 b/d, 48% below pre-war levels and 72% below the October 2024 peak ^[3]. Cargoes for September and October delivery were offered, but in smaller volumes than in July and August ^[14].
• September: China's imports of Iranian oil fell by nearly half year on year to 590,000 b/d, the lowest since January 2023. Iran exported no crude at all that month, according to Kpler. Iranian crude held on vessels outside the blockade zone fell from about 100 million barrels at the end of July to 45 million barrels ^[13].

Effects on Asian crude markets and competing suppliers

The loss of Iranian supply has pushed China's independent refiners towards other suppliers, at higher cost. In early October Reuters reported that they had bought at least 12 million barrels of Iraqi and Qatari crude for October and November delivery, mostly Basra Medium and Basra Heavy. The cargoes sold at premiums of about $12–20 a barrel to ICE Brent on a delivered basis, and buyers were unwilling to pay more than $20. Between late August and early September the same group had bought more than 20 million barrels from West Africa, Canada and Colombia ^[13].

Refining economics have weakened. Shandong refinery utilisation fell to about 55% at the end of September, from nearly 60% at the start of the month. Refiners were losing about 250–500 yuan a tonne, compared with profits of about 500 yuan a tonne in early September ^[13].

Vortexa sees Russian and Middle Eastern grades as the most likely replacement barrels for Chinese buyers ^[12]. We cover Russia's position in our analysis of Russian oil exports and sanctions in 2026. At the national level, China's crude imports fell from 11.79 mb/d in March to 8.93 mb/d in August and 9.03 mb/d in September. Reuters columnist Clyde Russell expects them to rise above 10 mb/d in October ^[15].

For competing suppliers, the shift has created new demand in a segment of the Chinese market that Iranian crude had largely served. Reported purchases so far have favoured Iraqi, Qatari and UAE grades, along with cargoes from West Africa and the Americas ^[11,13].

What to watch

• Diplomacy: the course of US–Iran negotiations and the status of the blockade, which will decide when Iranian crude can reach buyers again.
• Pricing: whether Iranian Light returns to a discount or premium against ICE Brent once supply resumes, compared with Iraqi and Qatari grades.
• Shandong margins: refinery run rates and margins, which show how far independent refiners can absorb costlier feedstock.
• Other buyers: whether any change in US policy, such as the temporary waiver in March, again allows historical buyers such as India to purchase Iranian oil.

Alupetra follows Iranian supply and Asian crude flows as part of its market analysis, and does not deal with sanctioned persons, entities or vessels.