Iran’s oil exports to China have dropped to a record low in two years, a senior analyst at consultancy HedgePoint said on December 15, indicating that recent US sanctions to crack down on Iranian crude were delivering.

Kim Benni, the head of trading at HedgePoint Global Markets, shared a chart on his X account showing that Iranian oil exports to China fell below 600,000 barrels per day (bpd) in November, noting that Iranian net sales “are starting to fade.”

This is the lowest volume since December 2022, according to the chart. In contrast, the chart shows that Iran’s exports to China, which typically account for more than 90% of Iranian seaborne sales, were around 1.8mn bpd in September and 1.3mn bpd in October.

As the graph shows, Iranian barrels sent to China have plummeted to less than one-third of September’s levels and roughly half of October’s figures.

“The slowdown of Iranian oil exports is confirmed beyond any reasonable doubt,” Benni wrote.  

Based on the chart, Iran has exported around 200,000 bpd to China this month.

The nosedive comes as the US has tightened the screws on Iranian oil sanctions over the past few months.

The Treasury Department blacklisted dozens of vessels involved in the delivery of Iranian oil, known as the “Ghost Fleet,” along with several companies in November and December.

Before the United States targeted Iran’s petroleum industry in 2018, the country was producing more than 3.8mn bpd and exporting around 2.2mn bpd. The sanctions drove production down to 2.2mn bpd and sales to a record low of 200,000 bpd.

However, with President Joe Biden taking office in the US in 2020, Iranian oil sales began to bounce back as Washington turned a blind eye to the trade.

The incoming administration of Donald Trump, set to take office in January, has declared its intention to further clamp down on Iran’s oil revenues through additional sanctions.

However, Iran’s Oil Minister Mohsen Paknejad has downplayed the threat of new US sanctions, saying that Iran has taken the necessary steps to circumvent these measures and has no worries.

The HedgePoint analysis came two days after the analytics group Kpler put Iran’s crude oil and condensate exports to China at 1.31mn bpd.

The Brussels-based firm attributed the 524,000 barrel-per-day drop from the previous month to geopolitical tensions, a growing energy shortage in Iran, and transport challenges stemming from tougher US sanctions.

Kpler, which has monitored 147 tankers involved in Iranian crude shipments this year, noted that the disruption in their operations was caused by the latest rounds of US sanctions, resulting in a buildup of floating storage, primarily near Malaysia and Singapore.

According to the oil cargo tracking firm, Chinese refineries, facing a supply crunch from Iran, have reportedly turned to spot purchases from non-sanctioned sources, such as the UAE and West Africa.

The fall of the Assad regime in Syria also seems to have redirected cargoes of Iranian oil previously bound for Syria toward China, potentially bolstering the bargaining power of Chinese refineries.

The price of Iranian oil sold to China has hit a five-year high this year, as US sanctions have increased logistics costs and made transporting Iranian oil to China more challenging.

Following the sanctions on Iran’s oil industry, China became the largest buyer of Iranian crude, with over 90% of Iran’s crude oil exports now destined for China, where it is refined in small, private refineries known as “teapots.”

Iran has consistently offered generous discounts to the teapots to ensure the continued flow of oil to the world’s largest buyers of crude.