Iranian oil shipments into China are set to fall in the near-term after new U.S. sanctions on a refiner and tankers, driving up shipping costs, but traders said they expect buyers to find workarounds to keep at least some volumes flowing.

According to the US Treasury Department, for the first time, the United States has imposed restrictions on China for purchasing oil subject to US sanctions. The sanctions were imposed on the Chinese petrochemical refinery Shandong Shouguang Luqing,