By Tsvetana Paraskova of OilPrice.com
China’s independent refiners are likely to return to buying higher volumes of Iran’s crude oil this month as stockpiles in Shandong, home to the independent Chinese refiners, have dropped to the lowest level this year after the biggest estimated monthly draw in a decade.
For most of the Middle East conflict, now in its sixth month, China’s independent refiners, the so-called teapots, have drawn on their reserves and limited purchases and imports amid spiking international crude oil prices and what appears to have been an unofficial Chinese policy to slash crude imports. China could afford to slash imports as it was estimated to have amassed more than 1.3 billion barrels of crude oil stashed in all commercial and strategic reserves.
However, current stockpiles at Shandong are estimated to have dropped to the lowest level in eight months at about 360 million barrels at the end of July, per data by Energy Aspects cited by Bloomberg.
The drawdown in July was about 35 million barrels in July alone, the biggest decline in a month since Energy Aspects began estimating and compiling data in 2016.
The independent Chinese refiners are therefore expected to increase imports of Iranian oil as of August, especially after millions of barrels of crude from Iran exited the Strai
