Prices for Russian and Iranian oil are decreasing in the Chinese market.

Oil prices from Iran and Russia have fallen due to reduced demand from China.

The decline in demand for oil of Iranian and Russian origin from China has begun to impact the export revenues of both countries, forcing them to sell oil at a discount. This trend could have a significant effect on the markets and incomes of both exporting countries.

According to trading sources from Reuters, Iranian light oil shipped to the Chinese province of Shandong is now trading at a discount of 50 cents to 1 dollar per barrel off global ICE Brent quotes. Previously, the price held at a premium of 1–2 dollars. The main consumers of sanctioned oil in this region are independent refineries.

There is also a decrease in premiums for ESPO oil from Russia for June deliveries. They fluctuate around 3-4 dollars per barrel, while in May, premiums were 4-5 dollars. Analysts note that Chinese refineries are reducing purchases due to high prices and reduced profitability in refining, as well as lower capacity utilization.

In May, the import of Iranian oil to China decreased to 1.10 million barrels per day, which is the lowest since January of the current year. Meanwhile, imports of oil from Russia dropped to 1.04 million barrels per day, the lowest level since August of the previous year, according to Kpler. This data contrasts with the previous period when Russian oil prices reached record highs in the last 13 years.

Amid global changes in the oil market, such shifts may have important implications for both exporters and consumers. The decline in revenues from oil exports could force Russia and Iran to seek other markets or adapt their pricing strategies.