By Pooya Stone

Iranian oil exports to China in June were down 60% from June 2018, according to China’s customs authorities, with only a daily average of 208,205 barrels of Iranian oil coming into China.

A heavy decline began in May when the US removed sanctions waivers on Iranian oil, but even then China was still importing 254 thousand barrels per day (bpd), which is 46,000 extra bpd than in June.

Prior to the US sanctions on Iranian oil, imposed in November last year, China was buying roughly 690 thousand bpd, but the average for 2019 is 437 thousand bpd.

It’s unclear whether any buyer has been arranged because state oil firms said they stopped taking Iranian oil in May, fearing US sanctions, and have started importing from Russia and Saudi Arabia instead. Despite this, the oil was offloaded at Jinzhou, Tianjin and Huizhou where Chinese oil firms operate refineries and commercial storage tanks.

It’s important to note that Iran owes money to Chinese companies Sinopec and CNPC for developing its oil fields in Khuzestan Province, so some of these oil shipments may actually be payment for the debt and would not have netted Iran any extra money.

The Chinese import-export data also show that exports to Iran have declined by 46% in the first six months of this year, compared with the same period last year, which is believed to be linked to US banking sanctions on Iran.

The sanctions are so severe that Iran, which used to export over two million bpd of oil, now exports less than 400,000 bpd, and many companies are refusing to insure or transport the oil, which means that the US is well on its way to getting Iran's oil exports to zero.

Iran is losing roughly $25 billion a year, which is crippling its economy, so it is putting pressure on Europe and others to help them evade US sanctions, even stepping up its nuclear program and breaching the 2015 nuclear deal.

The US is monitoring Iranian oil shipments and imposed sanctions on a Chinese company last week for transporting Iranian oil, in violation of US sanctions. On July 22, US Secretary of State Mike Pompeo said that Chinese company Zhuhai Zhenrong and one of its executives knowingly violated US sanctions on the import of Iranian oil.

Companies tracking oil global oil shipping report that Iran is stockpiling oil in China, but the exact quantity is not known. However, it is possible the stockpiled oil is not being reported by Chinese customs as imports since no Chinese entity has purchased it.