China's heavy reliance on Iranian oil imports
China, the world's largest crude importer, is the main buyer of oil from OPEC producer Iran, leaving Beijing uniquely exposed to any supply disruption from conflict in the Middle East.
Beijing, which is also the biggest buyer of oil from Venezuela and a top importer of oil from Russia, has used purchases from the three countries facing various Western sanctions to save billions of dollars on its import bill in recent years.
How much Iranian oil does China buy? China buys more than 80% of Iran's shipped oil, data for 2025 from analytics firm Kpler showed. Iranian oil has limited buyers due to U.S. sanctions aimed at cutting off funding to Tehran's nuclear program.
China purchased on average 1.38 MMbpd of Iranian oil last year, according to Kpler. That represented about 13.4% of the total 10.27 MMbpd of oil it imported by sea.
Who are the main Chinese buyers of Iranian crude? Chinese independent refiners known as teapots, clustered mainly in Shandong province, are the main buyers of Iranian crude, drawn by its discount to non-sanctioned barrels.
Teapots, which account for roughly a quarter of Chinese refinery capacity, operate on narrow and sometimes negative margins and have been squeezed recently by tepid domestic demand for refined products.
China's big state oil companies have refrained from buying Iranian oil since 2018/2019, traders and experts have said.
How much cheaper is Iranian oil? Iranian Light crude has traded at around $8 to $10 a barrel below ICE Brent on a delivered basis to China since December, from a discount of about $6 in September, traders said. That means Chinese refiners save about $8 to $10 a barrel if they buy Iranian Light rather than non-sanctioned Oman crude, according to calculations by a trader and Reuters.
Discounts have widened due to ample supply in onshore tanks and floating storage.
Iran has a record amount of oil on the water, equivalent to around 50 days of output, as China has bought less because of sanctions and Tehran seeks to protect its supplies from the risk of U.S. strikes, Kpler said.
Are U.S. sanctions having an impact? Washington reinstated sanctions on Tehran in 2018, and U.S. President Donald Trump's administration has imposed several new rounds of sanctions on Iran's oil trade since taking office in January.
Trump's sanctions have included penalties on three Chinese teapots, which has curtailed buying from several mid-sized independents worried about being designated, media reported.
What is Beijing’s stance on the Iran oil trade? Beijing rejects unilateral sanctions and defends its trade with Iran as legitimate.
Iranian oil imported by China is typically labelled by traders as originating from other countries, such as Malaysia, a major transshipment hub, and Indonesia.
Chinese customs data has not shown any oil shipped from Iran since July 2022.
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