Azerbaijan, Baku, June 25 /Trend S.Isayev/
Iran is likely to to try to increase its use of own tankers to transport oil to China in order to maintain China as a main oil buyer, EU economic advisor Mehrdad Emadi told Trend.
On June 20 Reuters reported that 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.
China has yet to work out a permanent way to obtain cover for China-flagged tankers that have been transporting at least part of the Iranian oil.
Platts reported on June 22 that China's crude oil imports from Iran in May returned to year-ago levels following a significant drop in the first four months of the year, rising nearly 39% month on month to 2.22 million mt (524,100 b/d), according to official customs data.
"Given the nature of the shipping regulations, which make insurance of oil a legal requirement for the tankers owners through internationally valid and credit-worthy contract, this change requested by Chinese in the delivery can open the door for random checks of tankers carrying Iranian crude to China as a means to check the validity of their insurance cover," Emadi explained.
He added that this added risk of possible detainment of Iranian tankers under the contention of invalid insurance can have a delaying if not additional restrictive impact on Iranian oil export.
Speaking of other options for getting Iranian oil, Emadi said China could, for a short term, look at what Japan has done.
Japan has secured a parliament approval that allows the government to provide insurance cover for imports of Iranian oil.
"If China agrees to participate in this kind of scheme, at best this should be seen as a temporary measure to allow for finding a suitable replacement for Iranian oil," Emadi said.
"Either way given the past history of such issues between China and Iran, in the case of Chinese firms the bulk if not the whole of the added costs is more than likely to be incurred by Iran," he noted.
Tehran's top customers, China, Japan, South Korea and India, have all cut imports this year as sanctions make it impossible to finance the deals, find tankers and arrange insurance cover to ship the crude.
All three, expect China, have earned a waiver from being cut off from the United States' financial system for reducing Iranian imports.
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