$1 billion of Iranian crude sits at China’s Dalian port

Some 20 million barrels of Iranian oil sitting on China’s shores in the northeast port of Dalian for the past six months now appears stranded as the United States hardens its stance on importing crude from Tehran, according to Reuters.

FILE PHOTO: Oil tankers pass through the Strait of Hormuz, December 21, 2018. REUTERS/Hamad I Mohammed/File Photo
Iran sent the oil to China, its biggest customer, ahead of the reintroduction of U.S. sanctions last November, as it looked for alternative storage for a backlog of crude at home.

The oil is being held in so-called bonded storage tanks at the port, which means it has yet to clear Chinese customs. Despite a six-month waiver to the start of May that allowed China to continue some Iranian imports, shipping data shows little of this oil has been moved.

Traders and refinery sources pointed to uncertainty over the terms of the waiver and said independent refiners had been unable to secure payment or insurance channels, while state refiners struggled to find vessels.

The future of the crude, worth well over $1 billion at current prices, has become even more unclear after Washington last week increased its pressure on Iran, saying it would end all sanction exemptions at the start of May.