Iran’s top four crude oil buyers lifted their purchases 17.2 percent in February from a year ago, as the OPEC member continues to ship more oil than allowed under a deal that eases some of the sanctions aimed at its disputed nuclear program.
Under the interim agreement reached in November last year between Iran and six major powers and that took effect in January, the Islamic nation is supposed to hold its exports at an average of 1 million barrels per day (bpd) for the six months to July 20.
However, imports by its four biggest buyers, China, India, Japan and South Korea, as well as Turkey, have totaled more than that since at least November last year, and tanker tracking data indicates only a slight slowdown in Tehran’s exports last month.
‘PRETTY GOOD DEALS’
“Maybe the prices are too good to be refused. The Iranians have been known to offer pretty good deals,” said Victor Shum, vice-president of energy consultancy IHS Energy Insight.
Iran’s higher exports could help cap benchmark oil prices that have risen due to supply concerns in countries like Libya, and with the escalating tensions between Russia and the West over the annexation of Crimea by the world’s top oil producer.
The increased buying of Iranian crude has come as the modest easing of sanctions has improved sentiment and reduced political risk for the OPEC member’s clients, industry sources say, but it has also sparked ire in the West.
The US reminded India earlier this month to keep its Iran imports at end of last year levels, according to government sources there, which would require Indian refiners to cut buying from Tehran by two-thirds from the first-quarter to drop its intake average back to 195,000bpd by July 20.
In February, Iran’s four big Asian buyers imported an average of 1.37 million bpd of Iranian crude, up from 1.17 bpd a year ago, according to official government data and tanker arrival schedules given to reporters.
“This is interesting because countries are supposed to limit their intake from Iran. But ... it’s hard to draw any conclusions,” Shum said.
Data for tanker loadings out of Iran for February and last month indicates there might be only a slight drop in the elevated imports over the next couple of months.
The US has said it believes Iran’s exports will fall in coming months to the 1 million bpd level stipulated by the interim agreement.
Iran’s biggest oil customer, China, lifted imports by 6 percent from a year ago to 552,613bpd in February, while South Korea’s crude imports more than doubled to 290,714bpd.
Iranian imports by Japan, which was the last of the four to report, rose 21.7 percent to 260,820bpd last month, Iranian Ministry of Trade data showed earlier yesterday.
Iran Imports into India declined 8.7 percent to about 266,000bpd.