China refiners snap up September Russian crude, eye Iranian oil as Mideast supply risks grow

Independent refiners, also known as teapots, in eastern China's Shandong refining hub are discussing deals with Iranian oil sellers, the sources said.

This week, Iranian Pars crude, a heavy grade, was sold at a discount of about $8 a barrel to ICE Brent for delivery to Shandong, widening from an earlier offer of about $6, one of the traders said. Offers for Iran Light have also slipped to discounts of about $3 to $4 a barrel compared with about $3 last week.

Teapots are not in a rush to buy crude as their refining margins have worsened with Brent LCOc1 surging to nearly $100 a barrel, the sources said.

The independent refiners had previously bought around 20 million barrels of Middle Eastern crude for loading in July to August, with some of them looking to resell the oil this week for profits, traders said.