Iranian oil prices slip to discounts on weak China demand
Iranian and Russian crude prices are declining as traders lower costs to attract Chinese independent refiners facing significant losses. Despite a sharp drop in Iranian exports to a six-year low, sluggish procurement and reduced refinery run rates in Shandong are weighing on market premiums.
Iran and Russia are cutting crude oil prices to entice buyers in China as demand from independent refiners slumps. Iranian Light crude is now trading at a discount of 50 cents to $1 per barrel against Brent crude. This price reversal threatens oil revenues for sanctioned producers facing a United States blockade and weakening global margins.
### Sluggish Demand Forces Price Cuts Traders in Shandong province, home to China's independent "teapot" refiners, report that Iranian Light prices fell from premiums of $1 to $2 over the past two months. Russian ESPO crude premiums also eased to $3 to $4 per barrel for June delivery, down from $4 to $5 last month. These price adjustments follow a period where refiners suffered losses due to high feedstock costs and weak domestic fuel demand.
