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Market Chatter: China Teapots Could Turn to Iran to Top Up Reserves After Drawdown

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China could seek to buy more Iranian crude oil as stockpiles held by its independent refiners diminish, Bloomberg reported on Tuesday, in what would be a boost to Iran after a period of slow sales.

Stocks in Shandong, where most of China's 'teapot' refiners are located, fell to 360 million barrels last month, the lowest in eight months, Energy Aspects data showed, according to the article. Some of that volume belongs to state-run refiners.

China's refiners are by far the biggest customers for Iran crude oil, buying about nine tenths of the country's output but they have increasingly turned to domestic reserve since the outbreak of the US-Iran war. Growing volumes of Iranian crude was left unsold and at sea as a result. Bloomberg said.

At the same time, Shandong stockpiles fell 35 million barrels in July according to Energy Aspects, the biggest drop in any one month since it began compiling this data. Nationwide, China's inventories remain strong at 1.21 billion barrels as of Aug. 6, analysts Kpler said.

China's National Energy Administration could not be reached for comment by.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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