Chinese Buyers Shift to Russian Crude as Iranian Supply Tightens
China's August crude imports rose 6.2% from July even as buyers redirected purchasing away from Iranian and Persian Gulf sources toward Russian barrels.
Chinese buyers stepped up purchases of Russian crude in recent weeks as Iranian supplies tightened and concerns over the Strait of Hormuz persisted, traders told Reuters on Thursday (2026-09-10). The pivot marks a significant routing shift for the world's largest oil importer as it rebuilds stockpiles in the wake of the US-Iran war.6
China's overall crude intake is climbing regardless. Imports hit 37.9 million tons in August, 6.2% above July's volume, customs data showed on Tuesday (2026-09-08), confirming a demand rebound that is stretching refiners' sourcing options. With Hormuz flows still below pre-war levels and Iranian cargoes constrained, Russian grades have become the path of least resistance for buyers who cannot wait for Gulf normalisation.4,5
The backdrop is the aftermath of the US-Israeli military campaign against Iran, which at its most acute point effectively halted seaborne exports through the Gulf and removed an estimated 10 to 15 million barrels per day from global markets. Chinese demand collapsed in parallel during that phase, providing an unexpected buffer to global prices. But demand has since recovered, and the re-sourcing challenge is now acute.5,1
Roughly 6 to 8 million barrels per day of Middle Eastern crude was flowing through Hormuz during the week of August 24 (2026-08-24), traders said, though attacks in the waterway may have reduced even that volume since. That partial recovery from a near-complete closure still leaves supply chains exposed. ICE Brent front-month was last at $104.32 per barrel as of September 12 (2026-09-12), with Urals crude at $103.70, near parity with the European benchmark and effectively erasing Russia's traditional discount to ICE Brent.3
That compression has made Russian crude less obviously cheap than it was during the sanctions period. Chinese buyers appear to be prioritising supply reliability over price. Russia shipped more than 10 million barrels to China through the Arctic's Northern Sea Route this year, Reuters reported in the week of August 31 (2026-08-31) — a route that bypasses the Gulf entirely.6
Middle Eastern spot markets reflect the Asia-wide scramble. Indian and Chinese refiners have been bidding aggressively for Persian Gulf grades, pushing Abu Dhabi's Murban to a premium of more than $30 per barrel over Dubai for delivery to East Asia, traders said, as of early September. Dubai crude itself was last quoted at $116.42 per barrel as of September 12 (2026-09-12).3
Iranian crude moved to brief discounts earlier in the cycle. Trade sources told Reuters on Thursday (2026-06-04) that Iranian Light fell to a $0.50 to $1 per barrel discount to ICE Brent for June delivery into Shandong, the home of China's independent teapot refiners, as Chinese demand was then still weak. The tightening described by traders in September reverses that dynamic: Iranian volumes are now insufficient to meet rebounding Chinese appetite.2
China's demand recovery is not running uniformly. Rystad noted that crude imports have fallen more sharply than actual oil use, with coal-based petrochemicals absorbing part of the gap. The IEA reported that electric vehicles displaced around one million barrels per day of Chinese oil demand in 2025, with electric trucks already making a meaningful contribution. Chinese natural gas demand fell 4% year-on-year from March through June, and LNG imports dropped 12% over those same four months, the IEA added.6
Strong August import figures could reflect inventory rebuilding rather than sustained throughput demand. Physical crude markets will try to draw that distinction as Chinese customs data comes in through the autumn.4,6
Iranian supply recovery remains the variable that could reset these routing patterns quickly. If Tehran's export capacity is restored, Chinese buyers may return to Gulf barrels and push Urals back toward its historical discount to Brent, which stood near zero as of September 12 (2026-09-12) — tighter than it has been in years. Until that happens, Russia's Arctic shipments and Murban premiums above $30 are each a measure of how much Chinese refiners are paying to keep crude moving outside the Gulf's reach.3,6