Traders: Chinese refining companies increase their purchases of Iraqi oil

The story in brief

Independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to offset Iranian supplies, traders said. Traders said that independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to compensate for shrinking Iranian supplies, at a time when exports from other producing countries in the region through the Strait of Hormuz are recovering. Strong demand from private refiners for non-sanctioned Gulf crude helped support the market after supply disruptions linked to the US-Israeli war on Iran.

Detailed summary

Independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to offset Iranian supplies, traders said. Traders said that independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to compensate for shrinking Iranian supplies, at a time when exports from other producing countries in the region through the Strait of Hormuz are recovering. Strong demand from private refiners for non-sanctioned Gulf crude helped support the market after supply disruptions linked to the US-Israeli war on Iran. Three informed traders said, according to Reuters, that Chinese refineries purchased at least 12 million barrels of Iraqi and Qatari crude oil from Mercuria, Tutsa, and Trafigura companies. One of them estimated total purchases at between 15 million and 20 million barrels.

Traders added that the shipments were sold at prices higher than the Brent standard on the Intercontinental Exchange by between $12 and $20 per barrel, and on a delivery basis. The majority of purchases were from Iraqi Basra Medium and Heavy crude oil, which are among the cheapest types of oil available in the Middle East. The sources said that Hongrun Petrochemical, Zhicheng Petrochemical, Hualong, and Chambroad Petrochemical are among the buyers. One trader said that Iraqi oil has become the new standard for independent Chinese refiners. Because of its availability and speed of delivery. The sources, who spoke on the condition that their names not be published because they were not authorized to speak to the media, stated that the Hongrun and Shenqi petrochemical companies purchased 3 million barrels of Qatari Al-Shaheen crude to arrive in early November, according to Reuters.

These deals came after purchases of more than 20 million barrels of crude oil from West Africa, Canada and Colombia between late August and early September, as Iranian supplies dwindled after the naval blockade imposed by the United States on Iranian ships in July. Kpler Analytics data showed that China's imports of Iranian oil fell by about half in September compared to a year ago, reaching 590,000 barrels per day, the lowest level since January 2023. Kpler said that the amount of Iranian crude oil stored on tankers outside the blockade zone fell by more than half, from 100 million barrels in late July to 45 million barrels. The company's data showed that Iran did not export any quantities of crude oil during September, for the first time since Kpler began tracking oil flows from the country in 2013.

Background & context

This story sits within Qatar's broader reform agenda and efforts to grow Oil & Gas as a pillar of non-oil GDP. The region benefits from supportive energy prices, expansionary government budgets, and rising interest from sovereign wealth funds and foreign investors.

Key numbers & facts

Three informed traders said, according to Reuters, that Chinese refineries purchased at least 12 million barrels of Iraqi and Qatari crude oil from Mercuria, Tutsa, and Trafigura companies.
One of them estimated total purchases at between 15 million and 20 million barrels.
Traders added that the shipments were sold at prices higher than the Brent standard on the Intercontinental Exchange by between $12 and $20 per barrel, and on a delivery basis.
The sources, who spoke on the condition that their names not be published because they were not authorized to speak to the media, stated that the Hongrun and Shenqi petrochemical companies purchased 3 million barrels of Qatari Al-Shaheen crude to arrive in early November, according to Reuters.
These deals came after purchases of more than 20 million barrels of crude oil from West Africa, Canada and Colombia between late August and early September, as Iranian supplies dwindled after the naval blockade imposed by the United States on Iranian ships in July.

Key points

Independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to offset Iranian supplies, traders said.
Traders said that independent Chinese refiners have increased their purchases of crude oil from Iraq and Qatar for delivery in October and November to compensate for shrinking Iranian supplies, at a time when exports from other producing countries in the region through the Strait of Hormuz are recovering.
Strong demand from private refiners for non-sanctioned Gulf crude helped support the market after supply disruptions linked to the US-Israeli war on Iran.

Why this matters

This matters because activity in Oil & Gas shapes capital flows, hiring and investor sentiment across Qatar.

Economic & market impact

Potential impact: - Oil & gas majors and oilfield services may react to volume, price or policy signals.

Potentially related sectors

Oil & Gas

GCC angle

For the rest of the GCC, this is a signal on the pace of activity in Oil & Gas. Capital flows and regulatory decisions in one Gulf state typically travel across borders given the similar economic structures and the coordination inside the GCC framework.

Risks & uncertainty

There is uncertainty around the read-through: projections can be moved by swings in oil prices, by US monetary policy tightening that most GCC central banks track via dollar pegs, and by regional geopolitical events. Headline numbers may also be revised when subsequent official data is published.

What happens next?

Watch for upcoming disclosures from listed names in Oil & Gas, official macro releases for Qatar, and any commentary from regulators or sovereign wealth funds. Tharwa will refresh this briefing as new public information becomes available.

Sources used

Asharq Al-Awsat