February 07 2020
China continues to import Iranian oil but does not appear to be paying for any of it anymore.
Chinese customs released its import figures for 2019 on February 1. They show that Chinese imports of Iranian crude oil averaged 494,000 barrels of oil a day in the first five months of 2019. Purchases then plummeted more than two-thirds and averaged just 154,000 barrels a day over the last seven months of 2019.
But China is due up to 250,000 barrels a day of free oil in debt repayments from Iran, indicating that China is now receiving only free Iranian oil and Iran is receiving no income from those deliveries.
Iran exports substantial quantities of oil to Syria as well, perhaps 60,000 barrels a day, but all that oil is delivered on credit so Iran receives no income from it.
It is widely agreed in the industry that Iran is selling more oil on the black market, though no one has identified destinations, amounts or the degree to which the sales prices are discounted. Therefore, no one outside Iran has any idea what Iran is making from oil sales.
In the quarter-century after the end of the Iran-Iraq War and before stiff sanctions were imposed in 2012, Iran’s normal oil exports totaled 2.5 million barrels a day. Currently, exports that earn some income are believed to be less than 10 percent of the old export rate—perhaps well below 10 percent.