Iran is reportedly gearing up to slash the price of its sanctioned crude oil stored offshore Singapore, in an attempt to recover the China market from Russia, reports The Straits Times quoting local industry sources.
According to The Straits Times, Iran is “offering the crude in tankers anchored in Malaysia and Indonesian waters at discounts of around US$5 to US$7 to Russian cargoes”.
Iran is estimated by Kpler to have around 93 million barrels of crude stored off the Persian Gulf and the coast of Singapore, while Vortexa estimates between 60 million and 70 million barrels.
In the aftermath of sanctions following Russia’s invasion of Ukraine earlier this year, the market saw large volumes of Russian oil diverted from Europe to Asia, challenging Iran’s market share in China.
Russia is now ranked as the top supplier of crude oil to China, overtaking Saudi Arabia in the past quarter, but the third-largest supplier to Asia at large, with Saudi Arabia and the UAE retaining the top two slots.
According to The Straits Times, Russia sold some 1.74 million barrels per day to China in August, grabbing 20% of China’s crude oil market share and making it the largest supplier.
Chinese refiners are keen to take advantage of heavily discounted Russian crude, and these shipments are expected to see another boost in volume in early December, when a G7 price cap on Russian oil goes into effect. The situation has left Iran on the losing end of the game