Published by Global Banking and Finance Review
Posted on February 28, 2025
4 min readLast updated: January 25, 2026
China's oil imports from Russia and Iran are rebounding as new tankers join the trade, easing supply worries and affecting global oil prices.
By Siyi Liu and Chen Aizhu
SINGAPORE (Reuters) - China's imports of Russian Far East crude and Iranian oil are set to rebound in March as non-sanctioned tankers, drawn by lucrative payoffs, joined the trade replacing vessels under U.S. embargo, trade sources and analysts said.
The rebound of sanctioned oil shipments to China, the world's top importer, is easing supply worries that had boosted global oil prices, they said.
Washington has imposed multiple rounds of sanctions on ships and entities dealing with oil from Iran and Russia since October, disrupting trade with major importers China and India.
The sanctions package on January 10 targeted more than 140 oil tankers, or about 42% of Russia's total seaborne crude exports and sparked a surge in freight rates.
A three-fold jump in freight rates for tankers to load ESPO crude from Russia's Far East port of Kozmino to China for the week-long journey drew at least 17 non-sanctioned tankers on the route between January 11 and February 20, Vortexa analyst Emma Li said.
The ships were either diverted from other sanctioned crude routes especially in the Baltics or were previously carrying oil products, Li said.
LSEG data showed 11 non-U.S. sanctioned tankers newly joined the Russia-China deliver route, including Serena and Naxos which previously shipped Russian oil to India.
"Surging freight rates after the sanctions have drawn clean vessels to join the Russian oil trade ... Shipowners bought more vessels to cash in the business," said a China-based trader with a Russian supplier, who declined to be named because he is not authorised to speak to the press.
Tanker rates from Russia's Far East to north China last stood around $4 million-$4.5 million, traders said.
Vortexa's Li said these ships lifted February ESPO crude loadings back at 2024's average of 920,000 barrels per day (bpd), up from 860,000 bpd in January.
The rebound comes after ESPO deliveries to China in February were set to fall to 780,000 bpd. Total Russian crude arrivals in February are the lowest since December 2022, Li said.
Separately, ship-to-ship (STS) transfers emerged at Nakhodka Bay near Russian Far East port for Sokol crude produced in Sakhalin.
Very Large Crude Carrier (VLCC) Daban loaded about 2 million barrels of the oil from three smaller tankers in early February, according to traders and Kpler data. Daban, previously used to deliver Iranian oil to China, was last seen heading to Yantai.
To facilitate discharge, newer terminals including at Shandong's Dongying and east China's Zhoushan stepped in to receive sanctioned oil tankers, Reuters has reported.
The discharges could slow down, however, as one of the terminals, controlled by Wintime Energy in south China's Huizhou port, has temporarily suspended receiving sanctioned ships, according to a person with direct knowledge of the matter.
Wintime did not immediately respond to an email or a call seeking comment.
Other factors contributing to more Russian flows include lower Russian runs due to Ukrainian drone attacks, which leaves more crude available for export, said Richard Bronze, head of geopolitics at Energy Aspects.
Also, more Urals cargoes are heading towards China, probably because of a slowdown in exports to Turkey and other destinations since the sanctions, he added.
IRAN
Supply from Iran has also improved.
China's Iranian oil imports rebounded to 1.4 million bpd in the period February 1-20, after falling close to a two-year low below 800,000 bpd in January, Vortexa data showed.
Shandong-bound Iranian volumes surpassed 1.1 million bpd and exceeded the 2024 average, the data showed.
Kpler data showed Iranian crude arrivals in China rose to 771,000 bpd in February, up from 692,000 bpd in January.
Data from the two groups varies as they use different methodologies to track the so-called shadow fleet.
Since late January, at least eight VLCCs, either recently added to the dark fleet or idled since early 2024, have surfaced to facilitate Malaysia-to-China ship-to-ship transfers, Vortexa's Li said.
That said, more pressure from U.S. president Donald Trump on Iranian exports is expected to result in a slowdown of shipments to China and eventually force Iranian production lower over a number of months, said Energy Aspects' Bronze.
(Reporting by Siyi Liu and Chen Aizhu in Singapore and Reuters reporters in Moscow; Editing by Florence Tan and Sonali Paul)
China's imports of Russian Far East crude and Iranian oil are set to rebound in March, as non-sanctioned tankers have joined the trade.
Multiple rounds of sanctions imposed by Washington have disrupted trade with major importers like China and India, targeting over 140 oil tankers.
Freight rates for tankers from Russia's Far East to north China have jumped to around $4 million-$4.5 million, driven by increased demand after sanctions.
Chinese Iranian oil imports rebounded to 1.4 million barrels per day in early February, recovering from a low of below 800,000 barrels per day in January.
Increased pressure from the U.S. on Iranian exports is expected to slow shipments to China and could eventually force Iranian production lower.
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