India has finally overtaken China as the largest importer of Iranian oil during the first quarter of this year. They achieved this due to a surge in buying ahead of the EU sanctions, due to take effect in July, which could severely reduce supply, and the fact that China has reduced its own purchases in a conflict over new contract negotiations.
During the first quarter of 2012 Indian imports were up by 23 percent from 2011 levels of 351,00 barrels per day (bpd) to 433,000 bpd, and more than China’s 256,000 bpd. In fact whilst India’s imports have increased by 23 percent, China’s have fallen by 40.3 percent over the same period.
India has so far been unable to earn an omission from the US and EU sanctions against Iran, which would enable them to continue to trade with the Persian state. They have been in firm opposition to the sanctions from the beginning, but are still pushing its refiners to try and cut down on Iranian imports. Whilst overall figures for the first quarter are up, they have been falling steadily; with 531,000 bpd in January, 404,000 bpd in February, and 363,000 bpd in March. If they are able to continue this trend for the next couple of months, they may do enough to earn a waiver from the sanctions.
Iran used to export about 2.2 million bpd, but as the date for the sanctions comes closer it has seen this volume fall by 300,000 bpd to just 1.9 million, mostly due to the withdrawal of many European customers.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com