News ID: 88374
Publish Date : 08 March 2021 - 22:00
LONDN (Dispatches) - Iran has moved record amounts of crude oil to top client China in recent months, while India’s state refiners have added Iranian oil to their annual import plans on the assumption that U.S. sanctions on the OPEC supplier will soon ease, according to six industry sources and Refinitiv data.
The National Iranian Oil Company (NIOC) has started reaching out to customers across Asia.
Sanctions caused a precipitous drop in Iranian exports to China, India, Japan and South Korea since late 2018. Those measures, and output cuts by fellow OPEC+ producers, have led to tight supplies of Middle East sour crude in Asia, the top global oil market. Asia imports more than half of its crude from the Middle East.
Restored Iranian supplies to India, the world’s third-largest crude importer, could reduce demand for spot cargoes, which has climbed recently after Iraq cut supplies and Kuwait reduced the duration of some contracts.
India, which is hurting from the recent sustained recovery in global crude prices, expects Iranian supplies to return to the market in 3 to 4 months, a government official said.
Unlike India, China never completely halted Iranian oil imports.
Iran moved about 17.8 million tonnes (306,000 barrels per day) of crude into China during the past 14 months, with volumes reaching record levels in January and February, according to Refinitiv Oil Research.
Of these, about 75% were "indirect” imports identified as oil from Oman, the United Arab Emirates or Malaysia, which entered China mainly via ports in eastern Shandong province, home to most of China’s independent refiners, or Yingkou port in northeastern Liaoning province.
The remaining 25% of imports were marked as official purchases for China’s Strategic Petroleum Reserves, Refinitiv said, as Beijing maintains a small purchase volume despite U.S. sanctions.
"Volumes started to surge from the last quarter of 2020, with Shandong province as the top receiving region which indicates independent plants are the main consumers,” said Emma Li, a Refinitiv crude flows analyst.
Spokesman’s Office of China’s Foreign Ministry said: "Iran is a friendly nation to China and the two nations have maintained normal exchanges and cooperation. The cooperation between China and Iran under the framework of international laws is both reasonable and legitimate, and deserves respect and protection.”
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