China’s Iran Oil Im­ports To Re­bound in De­cem­ber

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BEI­JING (Reuters) - China’s Ira­nian oil im­ports are set to re­bound in De­cem­ber af­ter two state-owned re­fin­ers in the world’s largest oil im­porter be­gan us­ing the na­tion’s waiver from U.S. sanc­tions on Iran, ac­cord­ing to in­dus­try sources and data on Refini­tiv Eikon.

Sinopec re­sumed Iran oil im­ports shortly af­ter Tehran’s big­gest crude buyer re­ceived its waiver in Novem­ber, while China Na­tional Petroleum Corp (CNPC)will restart lift­ing from its own Ira­nian pro­duc­tion in De­cem­ber, three sources with knowl­edge of the mat­ter told Reuters.

Reuters re­ported in Novem­ber that China’s waiver on U.S. sanc­tions al­lows it to buy 360,000 bar­rels per day (bpd) of oil for 180 days.

Top Chi­nese en­ergy group CNPC, which has in­vested bil­lions of dol­lars in Ira­nian oil­fields, is ready to load its full share of pro­duc­tion from De­cem­ber, said an oil ex­ec­u­tive with di­rect knowl­edge of CNPC’s Iran ac­tiv­i­ties.

The ex­ec­u­tive, who asked not to be named, es­ti­mated CNPC will load at least two mil­lion bar­rels a month from De­cem­ber, dou­bling pre­vi­ous lev­els to help com­pen­sate for cuts made be­fore sanc­tions on Iran’s oil ex­ports went into ef­fect on Nov 5.

Be­fore the waivers had been an­nounced, Sinopec, Asia’s largest oil re­finer, had planned to stop load­ing Iran oil in Novem­ber, but re­sumed im­ports within days of get­ting the ex­emp­tion, a sec­ond source said, also ask­ing to re­main un­named.

“We con­tin­ued lift­ing Ira­nian oil in Novem­ber be­cause we re­ceived the waiver,” the sec­ond source said.

Sinopec and CNPC will likely use up the 360,000 bpd of Ira­nian oil im­ports al­lowed to China un­der the waiver.

An­other source said Ira­nian oil is “at­trac­tively priced” ver­sus ri­val sup­plies from the Mid­dle East.

For Novem­ber and De­cem­ber, Ira­nian Heavy crude sold to Asia has been priced at $1.25 a bar­rel be­low Saudi’s Arab Medium, a dis­count not seen since 2004.

The source also said many Chi­nese re­fin­ers were geared to­ward pro­cess­ing Ira­nian crude grades.

At 360,000 bpd, China’s pur­chases would still be 45 per­cent less than the av­er­age 655,000 bpd im­ported dur­ing the Jan­uary-Septem­ber pe­riod. The rise in Ira­nian oil sup­ply and surg­ing pro­duc­tion from the United States, Rus­sia and OPEC coun­tries has pulled down crude oil prices LCOc1 by al­most a third since Oc­to­ber.

Ahead of the sanc­tions be­ing im­ple­mented in early Novem­ber, China’s crude oil im­ports from Iran fell to 1.05 mil­lion tons (247,260 bpd) in Oc­to­ber, the low­est since May 2010, Chi­nese cus­toms data shows.

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