If finalized, the move would mark the first direct purchases of Iranian crude by major Chinese state refiners since 2019, when PetroChina and Sinopec continued limited imports after the United States reimposed sanctions on Tehran’s energy sector during President Donald Trump’s first administration.

Officials at Chinese state oil companies said PetroChina and Sinopec are reviewing the banking, insurance and shipping arrangements required to restart transactions with Iran. The assessments follow a memorandum of understanding signed last week that ended the recent U.S.-Israeli conflict with Iran and led Washington to issue a waiver allowing customers to buy Iranian oil and settle transactions in U.S. dollars.

Industry sources said the refiners remain cautious despite the regulatory opening. Global crude supplies remain plentiful as exports from Saudi Arabia, Kuwait and Iraq continue to rise, while shipments through the Strait of Hormuz are expected to recover following the interim peace agreement.

“There is no shortage of crude in the market,” one industry source said, noting that uncertainty remains over financing channels, insurance coverage and Iran’s ability to provide sufficient shipping capacity for large-scale exports.

Neither Sinopec nor PetroChina immediately responded to requests for comment.

Chinese refiners have maintained healthy inventories by securing cargoes from alternative suppliers, including Russia, Brazil and West Africa, during recent disruptions in Middle Eastern supplies. Analysts say those arrangements have reduced the urgency to return to Iranian barrels.

Data from tanker-tracking firm Vortexa showed Iranian crude loadings accelerated sharply between June 19 and June 24, averaging about 1.6 million barrels per day, compared with roughly 340,000 barrels per day during the first 18 days of June and around 370,000 barrels per day in May.

Despite the rebound in exports, state refiners face a challenging domestic market. Weak fuel consumption and softer petrochemical demand have contributed to lower refinery utilization rates and reduced crude import requirements across China.

Independent refiners, commonly known as “teapot” refiners, remain the primary buyers of Iranian crude. These companies typically conduct transactions through intermediary traders and settle purchases in Chinese yuan, allowing them to maintain imports despite sanctions-related restrictions.

Among the major state-owned refiners, Sinopec is viewed as the most likely candidate to resume Iranian purchases. Sources said the company has faced tighter crude supplies in recent months and has drawn down commercial inventories since May, increasing the need to replenish stocks.

According to an industry official familiar with discussions between Sinopec and the National Iranian Oil Company (NIOC), the Chinese refiner explored potential purchases during a previous 30-day sanctions waiver issued in March but ultimately declined because the timeframe was insufficient to complete a transaction.

NIOC is now preparing for renewed interest from Chinese state refiners and expects inquiries to increase in the coming days, the official said.

Under the waiver framework, NIOC is expected to act as the sole contractual counterparty for crude sales, while Russia’s ESPO blend may serve as a pricing benchmark in future negotiations, according to industry sources.

NIOC did not immediately respond to a request for comment.