China imported around 800,000 bpd of crude from Iran in April—the highest amount that Iran’s top oil customer purchased since August last year—as Chinese refiners rushed to buy Iranian oil ahead of the expiry of the U.S. sanction waiver at the beginning of May, Reuters reported on Wednesday, citing ship tracking data from Refinitiv.
The United States ended the sanction waivers for all Iranian customers in a move that caught the oil market off guard as analysts were widely expecting that the Trump Administration would extend at least some of the waivers in order to keep oil and gasoline prices in check.
Iran’s oil customers were only guessing if the United States would extend the waivers that expired last week, so all Iranian clients, including its biggest customer China, rushed in to procure cheap Iranian oil in March and April.
In March, the biggest oil importers in Asia—China, India, Japan, and South Korea—collectively bought 1.57 million bpd of oil from Iran, a 36-percent surge over February. China alone imported 541,134 bpd of Iranian oil, according to government data and trade sources compiled by Reuters.
In April, China stepped up its purchases of Iranian oil from March and saw its imports from Iran at an eight-month high. The surge in Iranian imports resulted in China setting a new monthly oil import record, despite the fact that there was refinery maintenance and fuel demand was lukewarm, analysts tell Reuters.
Total Chinese crude oil imports rose by 11 percent year on year in April 2019, to reach 10.64 million bpd, according to data from the Chinese General Administration of Customs, calculated by Reuters.
State-run refineries bought a lot of Iranian crude oil to stockpile ahead of the sanction waivers expiry, and this was the key reason for the record Chinese imports last month, Wang Zhao, head of crude oil research at Sublime China Information, told Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.