Iran’s June oil exports to China surge as demand rises - Reuters

From June 1 to 20, China imported over 1.8 million barrels per day (bpd) of Iranian crude — the highest level recorded by ship-tracking firm Vortexa. Kpler, another data firm, estimated Iran’s June oil and condensate exports to China at 1.46 million bpd as of June 27, up from around one million in May.

The rise reflects a surge in Iranian oil shipments in May, when loadings reached a multi-year high of 1.83 million bpd, according to Kpler. Since Iranian crude typically takes several weeks to reach China, much of that volume arrived in June.

“Iranian shipments rose sharply before the recent conflict in the region, and China’s independent refineries increased demand for discounted barrels,” said Xu Muyu, senior analyst at Kpler.

Analysts said the June surge may reflect improved demand and shipping trends, while a possible easing of US sanctions enforcement could support future Chinese buying, according to Reuters. Trump said this week that Washington’s “maximum pressure” campaign remains official policy, but signaled a potential shift, saying China “can now buy Iranian oil.”

Despite the remark, all US sanctions on Iranian oil remain legally in place, and no formal change has been announced. Industry analysts say the market impact may be limited by Iran’s constrained production and export capacity.

Prices for Iranian Light crude have also narrowed relative to benchmark Brent, with discounts tightening to around $2 per barrel, down from earlier levels of $3.30 to $3.50, traders said. The shift came amid concerns over shipping risks in the Strait of Hormuz following US strikes on Iranian nuclear sites. ICE Brent crude was trading at $68 per barrel on Friday.

Constraints on future growth remain

While shipments have increased, Iran’s ability to sustain higher export levels is in doubt. A confidential Oil Ministry report, seen by Iran International, suggests Iran cannot significantly boost exports even if sanctions were fully lifted.

The report, citing Kpler data, said Iran averaged 1.4 million bpd in oil and condensate exports to China in the first half of 2025 — a 12 percent drop from last year. Structural issues, including aging oil fields, rising domestic consumption, and low investment, are limiting capacity.

“Even if all US sanctions were lifted, Iran’s daily oil exports probably couldn’t exceed 1.7 million bpd,” said Homayoun Falakshahi, a senior energy analyst.

Iran’s floating storage — unsold oil held at sea — has reportedly risen to 40 million barrels, reflecting difficulties in clearing inventory. Meanwhile, small Chinese “teapot” refineries remain Iran’s main buyers, but rely on deep discounts and face growing financial pressure.