Iranian methanol exports to China — which have so far flown under Washington’s radar — may be subject to scrutiny after the US threatened to impose secondary sanctions on buyers of the country’s oil.

About 40% of China’s methanol imports, around 5.2 million tons, came from Iran last year, Kpler data show. The chemical compound made from natural gas is used as a feedstock to create olefins, which are in turn used to make plastics. Methanol-to-olefin, or MTO, plants are the biggest buyers of cargoes originating in Iran, according to price-reporting and analytics firm ICIS.

“Iranian methanol is almost the only efficient way” for MTO units to get enough supply, said Ann Sun, a senior analyst at ICIS. Around 60% of standalone Chinese MTO plants are located on the coast, and it’s those facilities that rely on imported methanol, she said.
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