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Market Chatter: Middle Eastern Crude Price Cuts Attract China While Iran Struggles to Make Sales

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Chinese refiners are aggressively buying Middle Eastern crude oil from producers including Saudi Arabia and Iraq, Bloomberg reported on Thursday, citing traders with knowledge of the purchases, while refiners across Asia have been flooded with cargo offers as traffic through the Strait of Hormuz picks up.

Saudi Aramco and Abu Dhabi National Oil are offering crude on a more flexible basis to clinch sales, while a temporary easing of US restrictions on Iranian crude sales has also increased volumes offered. However, buyers still appear wary of falling foul of rules, with Chinese banks worried about financing deals.

Some cargoes from Aramco and Iraq have been sold at discounts of up to $5 per barrel below Brent futures on a delivered basis, the news agency said, making them cheaper than cargoes from West Africa and Brazil when freight is factored in.

Kpler estimates that more than 20 million barrels of crude from Iran has been idling in Asian waters for a week or more while Vortexa and Bloomberg estimates of Iranian oil on water range from 58 million to 68 million barrels, most with no stated destination, Bloomberg said.

(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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