Azerbaijan, Baku, Jan. 11 / Trend D. Khatinoglu/
Regarddless of the U.S. pressure on Iranian oil importers, Energy Studies Institute Principal Fellow at the National University of Singapore Hooman Peimani thinks that the Iranian crude is vital for Asian oil importers.
After accompanying the Europe Union with Washington's embargo on Iran's crude, the U.S. Treasury Secretary Timothy Geithner has started trip China and Japan, seeking their help to toughen sanctions on Iran.
U.S. President Barack Obama authorised a law on New Year's eve imposing sanctions on financial institutions that deal with Iran's central bank, its main clearing house for oil export payments. The move will make it difficult for consumers to pay for Iranian oil, Reuters reported.
On the other hand, EU agreed to discuss banning on Iranian crude a week before than scheduled time, January 30.
Peimani during an interview with Trend said China and Japan do not seem to cut Iranian crude import despite the U.S. pressure, though they may decrease Iran's crude import partly.
"China has a huge investment (About $40 billion) in Iran's energy sector, eyeing Tehran as its long-term crude, LNG and oil production supplier," he said.
Japan took precautions in case it joins an international embargo on buying Iranian crude by asking Saudi Arabia and the United Arab Emirates to help it make up any shortfall and South Korea is considering alternative supplies in case the U.S. sanctions cut off Iranian shipments, Reuters reported on Wednesday.
According to Reuters with the reference to a source, China will reduce crude imports from Iran for a second month, as the two remain divided over payment terms for Iranian crude.
China, which buys around 10 percent of Iran's crude exports, cut its January purchases by about 285,000 barrels per day.
Peimani believes that banning Iran's crude will lead to rising oil price in international market and regarding EU, Japan and China's vital need to boost economic growth, embargo on Iran's crude will damage their GDP growth as well.
Iran's crude and condensate importers
Iran's crude and condensate importers
|
Importers |
Share of Iran's oil export |
|
China |
22% |
|
Europe Union |
18% |
|
Japan |
14% |
|
India |
13% |
|
South Korea |
10% |
|
Turkey |
7% |
|
South Africa |
4% |
|
Sri Lanka |
2% |
|
Taiwan |
1% |
|
Other countries |
9% |
|
Totally |
100% |
Iran exports about 2.5 mbpd of oil including 2.15 million barrels of crude. Iran's total oil exports is carried out by shipping through Hormuz strait. Reuters reported earlier that Iran's oil tankers has harbored in Persian Gulf, holding 8 million barrels of unsold crude.
Saudi Arabia with 10.5 million barrels oil production capacity, which above 2 million barrels of surplus oil production capacity is the U.S. and its allies major option to replace Iranian crude.
Despite the difference between Saudi Arabia's super heavy surplus crude in sulfur content and Iran's heavy-light crude with medium in sulfur content and in the 28 degree to 35 degree API range, Peimani stated that Saudi Arabia's surplus crude can compensate in some cases given sudden fluctuations in oil prices, and oil production reductions in any given country, but can't replace Iranian crude in the long term.
Peimani also said cutting Iran's crude import immediately is impossible and finding the other oil suppliers will take time for them.