A record 39.3 million barrels of sanctioned crude are sitting on tankers off China's coast.

The stockpile includes 30.2 million barrels from Iran, 5.6 million from Venezuela, and 3.5 million from Russia.

This is up +454% from October and +17% from levels seen prior to the Iran war.

~77% of the crude is Iranian, but fresh offers have declined due to the ongoing war.

Furthermore, ~66% of the tankers are anchored in the Yellow Sea, with the rest in the South China Sea, indicating that most of the supply is parked close to China’s major refining hubs.

This floating stockpile acts as a buffer for China's private refiners, known as teapots, who have traditionally been the biggest buyers of discounted Iranian crude.

China can afford to weather the storm for now.