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Asia’s top two Iranian oil buyers boost imports as sanctions ease

Asia’s top two Iranian oil buyers boost imports as sanctions ease
AFP

BEIJING/NEW DELHI: Iran’s top two oil customers China and India have boosted imports in January, taking in close to the total volume the Islamic republic is permitted to sell to all buyers following the recent easing of sanctions.
The jumps indicate the OPEC member’s total sales in January to its four biggest buyers topped the 1 million barrels per day (bpd) level at which world powers want to keep shipments capped to maintain pressure on Iran to abandon its nuclear programme.
Tough sanctions have more than halved the country’s oil exports since early 2012, costing Tehran billions of dollars in lost revenue every month.
Yet, last month’s rise may not signify a continuing flood of Iran’s oil as shipments may have risen due to one-off factors. India was able to take more because it earlier cut purchases the most among Tehran’s top clients; China’s jump was partly linked to distortions in the data ahead of the Lunar New Year holiday.
“I don’t expect to see shipments to Asia rising back to pre-sanctions levels soon,” said Alex Yap, energy consultant at FGE Singapore. “It’s premature to say given the ongoing negotiations, but I don’t think Iran can come back until a further political deal is reached.”
Six world powers and Iran made a “good start” in talks in Vienna towards reaching a final settlement in the decade-old stand-off over Tehran’s nuclear programme, but conceded their plan to get a deal in the coming months was very ambitious.
An earlier agreement in November allows the OPEC member to keep exports at the current reduced levels of about 1 million bpd, less than half the pre-sanctions level.
The Geneva deal also exempts buyers of Iranian oil - most of whom are based in Asia - from continually reducing purchases to win sanction waivers every six months from the United States.
January’s rise in shipments is in line with data on Iran’s exports showing shipments rose three months in a row to close to 1.2 million bpd in January, according to sources who track tanker movements.
China, Iran’s largest oil client, imported 564,536 bpd of the crude last month, up 82 percent versus the same month last year, data from the General Administration of Customs showed on Friday.
That jump - partly linked to data distortions as companies tend to book cargoes in advance of the week-long holiday that began on Jan. 31 this year - brought imports back to levels before Western sanctions were applied more than two years ago.
The January imports from Iran were 11.2 percent higher than December’s 507,707 bpd.
For 2014, China may buy more Iranian oil as state-run trader Zhuhai Zhenrong Corp is negotiating a new condensate contract, Reuters has reported.
India’s imports from Iran more than doubled in January compared with a month earlier, hitting their highest since February 2012, with one state refiner returning from a three-month break as a buyer.
India’s oil purchase from Iran in January surged to 412,000 bpd, up from 189,100 bpd in December and 44 percent higher than a year ago, data compiled by Reuters showed.
The big jump last month brings India’s imports from Iran over April-January to about 201,000 bpd, still a decline of 26 percent from the same 10 months a year earlier.

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