Chinese state-owned refiners have started considering purchases of Iranian crude following a US waiver that allows the sale of some oil already loaded onto tankers, aimed at curbing price spikes caused by the West Asia conflict, according to sources familiar with the matter. Representatives from the National Iranian Oil Company and intermediary traders have also discreetly approached potential buyers among these and other Asian refiners. The sources spoke anonymously because the discussions are private.

Iran used to be a major supplier to Asian countries such as South Korea and Japan before US sanctions tightened. China remains Tehran’s most significant customer, providing essential financial support, though smaller private refiners typically handle these purchases due to lower exposure to global markets. Large state-owned companies have largely avoided Iranian crude, wary of potential US sanctions.

The US Treasury’s recent one-month waiver on seaborne Iranian oil mirrors similar measures taken to ease access to Russian oil, as the White House seeks to relieve supply shortages and stabilize global prices. While the waiver theoretically expands the pool of potential buyers, new entrants in China and elsewhere are carefully evaluating how to navigate purchases amid ongoing restrictions, including limits on Iran’s access to the international financial system. Another challenge is securing compliant shipping capable of transporting Iranian barrels.

Shipowners unfamiliar with Iranian crude are awaiting further guidance and have voiced concerns about potential hidden sanctions risks when dealing with intermediaries in the market, according to Karnan Thirupathy, sanctions expert and partner at Kennedys Law LLP. “There is significant uncertainty about the trade and about what will happen after April 19 if transactions are not completed,” Thirupathy said.

Even experienced intermediaries in the sanctioned oil sector are closely reviewing the waiver’s details to ensure compliance and avoid penalties, the sources added. Without clear guidance, the buyers of the already loaded seaborne oil are unlikely to change. The price of Iranian crude sold to China has already risen. Iranian Light crude is now being offered at a small premium to ICE Brent as suppliers gauge market demand, compared to discounts exceeding $10 per barrel last month.