China buys sanctioned oil from Venezuela at a bargain price

China doubled imports of Venezuelan and Iranian crude in 2021, taking full advantage of US-sanctioned regimes, as the nation’s refineries dismissed the risk of sanctions to source cheap oil.

Crude processors from the world’s largest importer bought 324 million barrels from Iran and Venezuela in 2021, about 53% more than the previous year, according to data from market intelligence firm Kpler.

That’s the most since 2018, when China acquired 352 million barrels from the two nations.

Chinese buyers, particularly private refiners, have benefited from Washington’s hard line on Iran and Venezuela, and they continue to buy its oil long after their counterparts in other parts of Asia stopped doing so.

The risk of non-US entities losing access to the US financial system, or having their assets frozen in that country if found guilty of violating the sanctions, has not deterred them.

A glut of unsold shipments, rising international prices that make sanctioned crude relatively cheaper, and Beijing’s issuance of more crude import quotas have incentivized private refineries to buy more oil from the US. pariah states. These shipments do not normally appear in the official customs data.

“This increase was caused by rising crude prices, which caused Iranian crude, anecdotally, to be up to 10% cheaper when delivered to China.”Said Anoop Singh, East Suez tanker research chief at Braemar ACM Shipbroking Pte Ltd.

For its part, the United States also relaxed the application of sanctions while trying to secure a nuclear deal with Iran, he said.