TOKYO (Reuters) – China’s Iranian crude imports rose by more than a third in May to the second highest on record, helping keep overall Asian buying above the level allowed under a deal that eases some Western sanctions, government and tanker-tracking data showed.
China, Tehran’s largest oil client, has since late 2013 been stepping up purchases after a landmark November nuclear deal eased some sanctions on Iran and has been making up the main portion of stronger Asian imports since then.
Iran’s biggest buyers – China, India, Japan and South Korea – together took in 1.26 million barrels per day of the Islamic republic’s crude last month, up 8 percent from the same period a year ago, government and tanker-tracking data showed.
For the first five months of 2014, their imports averaged 1.25 million bpd, up 25.3 percent from a year ago, keeping Tehran’s exports above the 1 million bpd cap that it agreed under a deal with the West for six months to July 20.
There are no indications that Washington will loosen up on the cap until a full nuclear deal with Tehran is reached, but there have been some signs of improving ties, including on how to respond to an Islamist militant insurgency in northern Iraq.
An oil industry expert in Asia, who declined to be identified, said concerns about unrest in Iraq disrupting oil supplies meant that some importers were also viewing Iranian supplies as more stable than Iraqi crude.
Tough western sanctions since 2012 have slashed Iran’s oil exports and crippled its economy by choking the flow of foreign exchange, but some of those measures were relaxed in November’s diplomatic deal in return for Tehran curbing its nuclear activities and shipments have been up from last year.
With less than four weeks left until a late-July deadline to strike an accord, Western officials have said Iran and six world powers have made very little progress towards striking a deal that could end years of hostility.
Asian buying volumes have held consistently above 1.1 million bpd since January – excluding oil going to other destinations such as Turkey and Syria – indicating the six-month export target will be missed.
Iran’s total crude loading also seem to have rebounded in May back up to about 1.38 million bpd, for arrival to destinations mostly in June, according to sources who track tanker loadings.
Iranian crude imports by China expanded 36 percent in May from a year ago to the second highest on record of 757,900 bpd, pushing up its average imports for January-May higher to nearly 50 percent on a year earlier.
India’s imports fell 0.6 percent to 255,200 bpd in May from a year ago, but its intake in the first-five months of the year still was up 37.7 percent at 310,500 bpd.
South Korea’s imports fell 43.3 percent from a year ago to 66,500 bpd of Iranian crude for the month. Shipments to Japan – the last of the four to report its oil intake – fell by 23.7 percent to 181,892 bpd last month, trade ministry data showed on Monday.