China's Unipec asks Iran to deliver July crude

China's Unipec, trading arm of top Asian refiner Sinopec Corp, has requested Iran to deliver July-loading crude cargoes to Chinese ports, ahead of a European insurance ban on Iranian oil exports that takes effect from July 1, Reuters reported.

"There is a company mandate requesting the July Iranian supplies to be on a delivered basis," said one oil official.

A European Union embargo on Iranian crude oil is set for July, but higher output from Saudi Arabia, Iraq and post-Gaddafi Libya has helped keep global supply ample, even as Iran's customers look for alternatives to Iran's oil.

Last month IEA said Iran's oil exports have decreased from 2.5 mbd to less than 2.0 mbd, and this figure is expected to fall even further to 1.5 mbd in the second half of 2012.

Sources told Reuters that Sinopec, the world's largest Iranian oil buyer, is expected to lift "a normal volume of oil based on the long-term contract" for July. One source estimated it at 500,000 barrels per day, a level similar to the average amount Sinopec bought from Iran last year.

Sinopec buys Iranian oil via two separate contracts, one through its trading arm Unipec, and the other via state oil trader Zhuhai Zhenrong Corp.

It was not immediately clear if Zhuhai Zhenrong also requested supplies on a delivered basis.

Earlier this month Reuters reported that shipments from Iran received by Unipec averaged 270,000 to 280,000 barrels a day in April and May, in line with last year.

Imports fell in the first quarter after Unipec, which accounts for half of China's crude purchases from the Persian Gulf nation, failed to agree on annual payment terms with National Iranian Oil Company.


Edited by: S. Isayev