Iran denies China cut imports of its oil

Iran denies China cut imports of its oil

Iran denies China cut imports of its oil

By Zahra Hosseinian

An Iranian oil official denied major buyer China had cut imports of crude from the country in 2012, the semi-official Mehr news agency reported on Friday, after Chinese data showed they were a third lower in the first quarter than a year earlier.

The customs data this week showed China - until recently Iran's top customer - halved its Iranian crude imports in March compared with the same month in 2011.

Industry sources have said the reported fall, adding to Tehran's problems as it faces Western sanctions over its nuclear development programme, was due to disputes over contract terms.

"Iranian crude exports to Chinese refineries have not decreased at all in the current year," the head of international affairs at the National Iranian Oil Company (NIOC), Mohsen Ghamsari, told Mehr.

"On average we are exporting about 500,000 barrels of crude to China per day," he added.

The United States and its allies have imposed strong new sanctions against Iran's financial and energy sectors to force Tehran to abandon its uranium enrichment activities. Washington suspects it of covertly developing nuclear weapons, a charge Tehran denies.

The European Union announced in January a total ban on purchasing Iranian crude, to be implemented in July.

Iran traditionally sells most of its oil exports to Asia, where China, India, Japan and South Korea have been the biggest buyers. But China's state oil buyers have decreased their purchases since the start of the year.

In the first quarter of this year, China's crude imports from Iran were a third lower at 346,183 barrels per day (bpd) compared to a year earlier, customs data showed, mainly because the state-run China Petroleum & Chemical Corp (Sinopec) slashed purchases by 285,000 bpd, or just over half of the amount it imported daily in 2011.

China cut its oil imports from Iran 5 percent year-on-year in January and 40 percent year-on-year in February. March imports dropped 54 percent to 253,302 bpd, the data showed.

Industry and company sources said this week that South Korea will make sharp cuts in imports of Iranian crude from June as tightening Western sanctions make it impossible to secure insurance cover for tankers to ship the crude.

Iran has played a tit-for-tat game over crude shipments since the European Union's oil embargo announcement. EU states have since scrambled to find alternative supplies before that deadline, with Iran threatening to cut exports before then.

The EU had been the second biggest buyer of Iranian oil after China and its embargo is a direct strike on the biggest source of export income for Iran, the second largest producer in the Organization of the Petroleum Exporting Countries (OPEC).

As sanctions against Iran have intensified, Gulf Arab exporters including Saudi Arabia, Kuwait and the United Arab Emirates have boosted their exports.

The threat of a cut in Iranian supplies drove oil prices in March to $128 a barrel, their highest level since 2008.

Source: REUTERS