"It is inevitable that a lot of Iranian oil will continue to leak through into the market, albeit through more circuitous routes." Also, despite the growing number of Iranian customers who are now switching to Saudi Arabian oil, there is at the moment still "plenty of other potential takers" of Iranian oil, with Russia for one, speaking out against the oil embargo, says Brown. Like Brown and Larry, BNP Paribas' head of commodity markets strategy Harry Tchilinguirian is taking a wait-and-see approach on how much China could benefit from the tensions, explaining that the crucial driver behind how much of a reduction Iran is willing to take on its oil products will also depend on how much volume of Iranian oil comes under embargo. "Will India and Korea follow suit is another question?," he said, in reference to Japan's announcement that it will take steps to reduce its oil ties with Iran. Depending on the amount of oil that comes under embargo, "the more pressure on Iran to discount its crude aggressively," Tchilinguirian explains. While many analysts think that China will play both sides of the Western-Iranian tensions to its advantage, analysts such as Gal Luft , executive director at the Institute for the Analysis of Global Security, says that the country is already showing signs of really bowing to Western pressures; Luft says China's crude imports from Iran fell by half this month and that this reduction is projected to continue. "The Chinese leadership has finally realized that its current ties with Iran are becoming a geopolitical liability and I don't foresee them making any trade moves in the near future," he said; though Exclusive Analysis' Shoemaker points out that completely paring down its oil ties with Iran would be a very difficult decision for China, as it views Iran as a "key conduit to influence the Middle East, especially as its relations with the U.S. are poor." Overall, says Crispin Hawes, head of Eurasia Group's Middle East and North Africa practice, any truly substantial benefits China could take away from the Western-Iran tensions would likely take place further down the road. As Brown of Natixis had said, there are still many takers of the country's oil at this moment despite the growing number customers now turning to Saudi Arabian oil. Thus, the limited oil price reductions that Iran appears to be making. For months, Iran had largely refused to budge to Chinese requests for prices cuts, according to Hawes, forcing China to sign expensive supply contracts with Russia and Vietnam at a premium, as part of a strategy to force the Iranians to cut prices. From an equities perspective on Iran, Morningstar energy analyst Allen Good says any oil producer would benefit from oil prices should something happen in the country -- such as the closure of the Strait of Hormuz. One example would be BP ( BP), which today was upgraded to buy by Jefferies. Analysts cited its potential to demonstrate good free cash flow growth in 2012, potentially leading to dividend increases. Good thinks this type of oil price increase would be particularly beneficial to domestic players such as SandRidge Energy ( SD) and Whiting Petroleum ( WLL) as well as oil sand plays such as Suncor Energy ( SU) and Canadian Natural Resource ( CNQ), given their relative political safety. Mid-continent refiners such as HollyFrontier ( HFC ) and Western Refining ( WNR ) would also get a boost if the price spread between the European benchmark Brent crude product and the U.S. West Texas Intermediate (WTI) product were to widen on any trouble in Iran. -- Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse.