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Crude oil exports from Iran to its four largest buyers in Asia fell to a three-year low last year because of the reinstatement of U.S. sanctions against Tehran in November, Reuters reports.
Although the sanctions kicked in only in November, Asian importers began reducing their imports of Iranian oil earlier, with South Korea completely suspending imports in August.
The average daily rate of imports for China, India, Japan, and South Korea was 1.31 million bpd in 2018, according to import data, which was 21 percent lower than the average for 2017 and the lowest since 2015 when Iran was under international sanctions. These were lifted with the signing of the so-called Iran nuclear deal, which allowed the country to rejoin the international oil market.
Still, in December, China and India upped their imports of Iranian crude, while South Korea and Japan began planning for the restart of deliveries. China imported more than 500,000 bpd of Iranian crude last month, with India taking in more than 300,000 bpd during the period. According to Energy Aspects, these two, Iran’s biggest oil buyers, will continue importing crude at the same rate of about 800,000 until May, when the sanction waivers will expire.
Yet the December amounts are higher than what Washington said China and India would be allowed to import from Iran: the China allocation was for 360,000 bpd and India’s was 300,000 bpd.
“After May, it will all depend on the U.S. administration’s decisions, which at the moment remain completely obscure. On balance, they are likely to extend the current waivers, although rumours are that there could be a significant cut in waivered volumes,” Reuters quoted Energy Aspects analyst Ricardo Fabiani as saying.
Yesterday, S&P Global Platts reported that Japan, South Korea, India, and China are all buying Iranian crude once again, but at much lower rates than they did before November. According to the S&P Global Platts calculations, the rate at which India, Japan, and South Korea are importing Iranian crude at the moment is at least half that of the rate seen before the sanctions went into effect.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.