Chinese Teapots Snap Up Middle East Crude as Prices Slide

Chinese private refiners, known as teapots, have stepped up purchases of Middle Eastern crude on the spot market as oil prices slide, according to trading sources. Rongsheng Petrochemical Co. bought a cargo of Saudi crude for prompt delivery this month, while Shengdong Petrochemical Group Co. snapped up an Emirati Upper Zakum cargo. A third private refiner purchased Iraqi Basrah crude for delivery next month, Bloomberg reported.

The buying spree comes as oil prices have fallen sharply on reports that tanker traffic in the Strait of Hormuz is recovering and Gulf producers are ramping up output. For energy traders, the return of Chinese teapots as buyers is a key demand signal. These refineries, which account for roughly a fifth of China's crude processing capacity, tend to be price-sensitive and opportunistic. Their renewed appetite suggests current prices are attractive enough to incentivize restocking, which could help put a floor under the market. Live fuel prices and charts on NowPrice show how the market is reacting to these spot purchases.

Looking ahead, traders will watch for further teapot buying activity, particularly for Iraqi and Iranian grades, as well as the trajectory of Middle East premiums. If the buying broadens, it could signal that Chinese demand is picking up after a sluggish period, potentially supporting crude prices. The next key data point will be China's crude import figures for July, due later this month.