IRANIAN OIL OFFERS TO CHINA FALL AS U.S. BLOCKADE BITES

Developing story: Iranian cargo offers, floating storage, Chinese purchases and U.S. sanctions details may change as traders and governments respond.

Offers of Iranian crude to Chinese buyers have fallen and prices have jumped as the U.S. blockade cuts into Tehran’s oil shipments, according to Reuters reporting based on four trade sources. The squeeze points to the practical effect of Washington’s pressure campaign on Iran’s main source of hard currency and China’s independent refiners.

The United States reimposed its blockade of Iran’s shipping and ports on July 13 after an earlier deal to halt the war broke down. Reuters reported that the move was designed to cut off oil sales, which remain central to Iran’s ability to earn foreign exchange, even after years of sanctions and wartime damage to energy infrastructure.

The decline in offers is now reaching near-term cargo planning. Trade sources told Reuters that offers for September and October delivery cargoes have fallen from July and August levels as barrels already floating on the water have been sold. That suggests the squeeze is moving from political announcement to physical supply constraint.

Kpler data cited by Reuters showed no visible crossings of Hormuz by supertankers carrying Iranian crude since mid-July, though many vessels turn off their location transponders and become harder to track. The data therefore cannot establish that no Iranian oil is moving, but it does show that visible flows have been sharply reduced.

The effect on pricing is notable. Iranian crude has usually sold at a discount because buyers face sanctions, financing, insurance and reputational risks. Reuters reported that some Iranian crude was being offered at premiums to ICE Brent futures, an abrupt shift from discounts offered earlier in the week and a month earlier.

Chinese independent refiners in Shandong are particularly exposed. They account for about a fifth of China’s refining capacity and have long been major buyers of sanctioned oil. If Iranian supply is less available or more expensive, those refiners may need alternative cargoes, lower run rates or higher costs passed through product markets.

The blockade also intersects with the next U.S. sanctions package. Treasury Secretary Scott Bessent has said Washington will announce what he called the toughest sanctions in history on Iran. If those measures target intermediaries, shipping networks or buyers more aggressively, Iranian oil flows to Asia could tighten further.

What is confirmed is that traders report fewer Iranian crude offers to China and higher prices as the U.S. blockade limits shipments. What remains unresolved is how much oil is still moving with transponders off, whether Chinese buyers absorb the pressure and whether new U.S. sanctions further reduce Tehran’s oil revenue.

Fact-check date: August 21, 2026. Article type: News. Sources: Reuters; Kpler. Developing note: Iranian cargo offers, floating storage, Chinese purchases and U.S. sanctions details may change as traders and governments respond.