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Japan, South Korea, India, and China are all buying Iranian crude once again, but at much lower rates than they did before November when U.S. sanctions kicked in, S&P Global Platts calculations reveal.
All four countries, along with another four, were granted sanction waivers for a period of 180 days, with China and India only lowering their intake of Iranian crude, while Japan and South Korea suspended Iranian oil imports ahead of the sanctions.
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 lower than the rate from before the sanctions went into effect.
India and China are Iran’s largest crude oil buyers, accounting for 80 percent of the country’s oil exports to Asia, which, in total, constituted half of Iran’s overall oil exports. Now, as the sanction waiver window narrows, S&P Global Platts analysts expect Iran’s oil exports to fall to 1.2 million bpd over the first four months of 2019, and further slump to 860,000 bpd in the fourth quarter of the year. This compares with an average 2.7 million bpd in the first few months of 2018, before President Trump pulled the United States out of the so-called Iran nuclear deal last May.
There has been talk among analysts that Washington will probably grant waiver extensions to Iran’s biggest Asian clients who would apparently find it difficult to replace the cheap supplies of Iranian crude with alternative sources cost-efficiently.
However, Washington officials have remained firm that there will not be any waiver extensions. Earlier this month, speaking on the sidelines of an oil industry conference in the UAE, the U.S. special representative for Iran Brian Hook said, “We are not looking to grant any waivers or exemptions to the import of Iranian crude,” adding “Iran is now increasingly feeling the economic isolation that our sanctions are imposing ... We do want to deny the regime revenues.”
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.