Iran arrests oil decline as China imports record
Iran is set to arrest a slide in oil shipments in July as China increases imports to a record high to account for more than half of Iran's crude exports and prevent a further slump in Tehran's oil revenues, an industry report said.
Iranian supplies are expected to average 1.084 million barrels a day in July, little changed from 1.094 million bpd of exports in June, in what Geneva-based consultancy Petrologistics said was a preliminary report.
Tehran's oil exports halved in the four months from February to June because of U.S. and European Union sanctions aimed at discouraging what the West fears is an Iranian programme to develop nuclear weapons.
Only four countries are expected to import Iranian oil in July -- China, India, Japan and Taiwan, Petrologistics said, although it is possible a cargo could be diverted to Turkey.
An EU embargo on oil purchases and shipping insurance came into force at the start of July, and non-EU Turkey has also cut back sharply on Iranian oil.
Having cut imports to negotiate price discounts, China is now easily Iran's biggest customer. It is expected to increase imports to 590,000 bpd in July, or 54 pct of Iran's total exports, from 430,000 bpd in June and 480,000 bpd on average on 2011, the Petrologistics report said.
If China's final customs data confirms the figures, China's exemption from U.S. sanctions that seek to enforce internationl cooperation with its efforts against Iran could be at risk. On Washington in June granted Beijing a six-month exemption from sanctions that threaten to penalise the countries that trade oil with Iran on the basis that China had cut imports.
India may find itself in a similar position. Its Iranian oil purchases in July are expected to rebound to 335,000 bpd from 264,000 bpd in June, a little above its average imports last year of 326,000 bpd, Petrologistics said.
The increases by China and India contrast with Iran's two other big Asian importers in previous years, Japan and South Korea. Japan is expected to import 98,000 bpd this month or little more than a third of last year's purchases. South Korea cut imports from Iran to zero in July after failing to secure shipping insurance. It took 240,000 bpd last year.