China’s import of Iranian oil reached the highest level in almost a decade as rising global prices make the discounted crude more attractive, according to Belgium-based data and analytics firm Kpler.

The easing of a probe by Beijing into imports of bitumen mixture, which Iranian crude is sometimes disguised as appears to be speeding the passage of cargoes through customs, the firm said, citing traders involved in the market.

However, China customs data do not show any Iran imports since mid-2022.

The world’s biggest oil importer will take nearly 1.5 million barrels a day of crude from Iran this month, Kpler estimated, adding the crude is purchased by independent refiners clustered in China’s Shandong province.

Beijing averaged 917,000 barrels a day in the first seven months of the year.

Iran’s two main grades are currently trading at discounts of more than $10 a barrel to Brent, traders said, which are considerably cheaper than Russian varieties.

“The higher flat prices go, the better risk-reward ratio for Shandong refiners to look for Iranian crude,” said Homayoun Falakshahi, a senior oil analyst at Kpler.  

Meanwhile, Vortexa Ltd., another company that monitors oil flows into China, expects the country to take about one million barrels a day of Iranian crude this month, compared with 1.3 million barrels in December.

The contrasting estimates from the tanker-tracking firms may be attributed to different flow analysis methods.

“Crude import quotas and uncertainty on non-crude import standards are holding China’s imports in August in check,” said Emma Li, an analyst at Vortexa.

Some of the increase in Iranian oil exports may also go into floating storage, she added.

Oil prices continued to fall in early trading on Wednesday, with Brent crude futures down 21 cents to $84.68 a barrel. US West Texas Intermediate crude (WTI) declined 20 cents to $80.79 a barrel. 

(Editing by Seban Scaria seban.scaria@lseg.com)