Asian refiners see little room for Iranian oil, leaving China as key buyer after US waiver

FE Team | Published: June 23, 2026 22:14:23

NEW DELHI/SINGAPORE, June 23 (Reuters): A temporary US sanctions waiver on Iranian oil sales is unlikely to draw orders from well-stocked Asian refiners, leaving independent Chinese refineries as the main buyer, trade sources and analysts said.
The US authorised on Monday the sale of crude, petroleum products and petrochemicals of Iranian origin through August 21, easing decades-old sanctions as it pushes toward a final peace deal with Tehran.
Hit by supply disruptions due to the blockade of the Strait of Hormuz since March, Asian refiners have been aggressively buying oil from the US, Russia, Africa and Latin America.
But the US-Iran interim peace deal is reopening the strait and allowing oil stranded for months to exit, weighing on global oil markets. Middle Eastern producers are also now pressuring buyers to lift contracted volumes under annual deals, sources said.
The National Iranian Oil Co has sought proposals from Asian refiners for the purchase of its oil, one of the sources said. An industry source close to NIOC said it is calculating delivered prices of rival crudes to China for possible spot sales. Another source said Iranian oil sellers have temporarily halted offering cargoes to China's eastern Shandong province as they assess demand from other countries.
"Most oil companies are covered till August. We were not expecting a waiver and had already bought whatever was available in the market," said a source at an Indian refiner. "In fact, we booked some crude cargoes for August at a premium."
Sumit Ritolia, lead analyst at ship-tracking firm Kpler, said: "With India's crude supplies comfortable until August, the biggest beneficiary of any sanctions waiver on Iranian oil would likely be China, which needs crude for both processing and strategic stock replenishment."
Three Asian refiners, which last bought Iranian oil nearly a decade ago, said they have bought enough crude for now while non-sanctioned supplies have become affordable.
And besides compliance challenges, the timing is too tight and Japanese refiners will need to conduct trial runs before resuming purchases, Japanese oil sources said.
Iran ramps up exports
Buyers are also cautious due to uncertainty over the sanctions relief, Washington's policy stance and challenges in dealing with banking and payment issues, the sources and analysts said.
"Iran will take this opportunity to ship as many cargoes out of the Gulf as possible," ship-tracking firm Vortexa said, adding that Iranian crude on water has increased by 6 million barrels over the past 48 hours.