China’s Iran crude imports plunge

Kurdistan before fleeing to Turkey.

Iraqi Kurdistan halted oil exports through the Baghdad-controlled IraqTurkey pipeline in December in a dispute over payments to oil companies operating in the autonomous region.

In early January, Kurdistan began exporting crude oil directly to world markets through Turkey, further angering Baghdad, which threatened action against the region and foreign oil companies working there to stop “illegal” crude exports.

A broad energy partnership between Turkey and Iraqi Kurdistan ranging from exploration to export has been in the works since last year.

Also: ISTANBUL: The Turkish lira eased on Monday on persistent selling following the central bank’s decision to cut interest rates last week, and shares in Koc Holding dipped after Turkey cancelled BEIJING, Feb 25, (Agencies): China’s crude oil imports from Iran plunged last month to their lowest since March 2012 when differences over payment terms of annual contract deals slashed shipments from the Islamic republic nearly in half.

The fall in purchases by Iran’s top customer in January helps back the International Energy Agency’s (IEA) estimate that the OPEC-member’s oil output likely fell further from its lowest in three decades due to tighter Western sanctions. The tough measures have made it difficult for buyers to pay Iran for its oil and find tankers to ship it, hurting Tehran’s revenues.

The IEA, the West’s energy agency, said preliminary data suggested Iran’s oil exports could have fallen below 1 million barrels per day (bpd) in January.

China, the world’s second-largest oil consumer, bought 1.316 million tonnes of Iranian crude in January, or about 309,906 bpd, versus 593,400 bpd in December, according to data from the General Administration of Customs.

China imported 490,727 bpd of Iranian crude in January 2012, and shipments in March plunged to 253,300 bpd before the two sides settled the contractual differences for last year’s oil.

Analysts were surprised at the extent of January’s decline after December’s crude imports jumped to last year’s second highest daily levels, following Iran’s addition of more tankers to its fleet and the easing of a shipping shortage that had delayed deliveries to its buyers. But analysts also said one month’s number wasn’t indicative of any trend.

Comparison

“I think one month’s comparison is not enough to figure out what happened,” a dealer at trading house in Singapore said, declining to be identified because he is not authorised to talk to the media. “If you see the numbers, November was down but imports rebounded in December. It’s all based on the lifting plans.”

China — along with other main buyers of Iranian crude, including India, Japan and South Korea — has been under pressure from the United States and Europe to steadily reduce Iranian imports. The West says Iran’s enrichment of uranium demonstrates its intent to develop a nuclear weapons capability, an allegation the Islamic Republic denies.

China is Iran’s top trading partner and has repeatedly voiced its opposition to unilateral sanctions outside those sanc- a tender it had won to run toll roads and bridges.

The lira has been under pressure since the central bank cut two main interest rates last Tuesday, and as investors’ appetite for riskier assets diminished on concerns that the US Federal Reserve would stop pumping more dollars into currency markets.

Bond yields were steady, with twoyear benchmark bonds inching up two basis points to 5.69 percent, and benchmark stocks eased 0.17 percent to 75,769 points, underperforming a 0.12 percent rise in the global emerging markets index.

At 0905 GMT, the lira traded at 1.7983 to the dollar , after hitting a three-month low of 1.8037 in early trade, down from 1.7965 late on Friday. Against a euro-dollar basket it fell to 2.0904 from 2.0797.

“Investors continue to sell the lira after the central bank meeting. The bank’s tioned by the United Nations.

But shipping delays — along with the contract disagreement in the first quarter — reduced China’s crude imports from Iran last year by 21 percent from a year ago to 438,448 bpd.

China may reduce its purchases by a further 5 to 10 percent in 2013, according to preliminary indications, industry sources said. That would amount to a reduction of 20,000 to 40,000 bpd, according to Reuters calculations.

China’s Iranian crude import figures could also be pulled down by a price increase for South Pars condensate that was agreed to last year. Iran changed the pricing of its 2013 term exports of the condensate to China’s top refiner, Sinopec Corp, effectively raising the premium on sales of the super light crude to its top client, Chinese industry sources said in January.

The price increase had led some Sinopec refineries to moderately reduce contracted volumes for 2013, although it is not known by how much. Sinopec imported about 70,000 bpd of the South Pars condensate last year.

Other top importers of Iranian crude on Friday also showed sharp drops from January last year. comments about the lira’s real exchange rate and the rate cuts will likely weaken the lira for a while,” said Burcin Metin, head of forex at ING Bank.

Investors were eyeing the outcome of a meeting by Turkey’s competition regulator with a dozen banks on Monday to hear their defence for alleged collusion in setting loan rates, with a final verdict due within 15 days.

“If the joint price setting behaviour becomes the final verdict, the penalty is said to be no less than the 2 percent of the banks’ revenues and the upper limit is at 10 percent. The upper limit would hurt the profitability of banks considerably,” wrote Ayse Colak, executive vice president at Tera Brokers.

Shares in Koc Holding, Turkey’s largest company, and its fellow consortium bidder Gozde Girisim fell nearly 3 percent each after the government said it cancelled a $5.7 billion they won in December to operate toll roads and