Business | Oil & Gas

Chinese demand boosts Iran oil shipments

Iran shipped more than 1.4 million bpd of crude oil in December

  • Reuters
  • Published: 15:57 January 31, 2013
  • Gulf News

London: Iran crude oil exports leap to their highest levels since EU sanctions took effect last July, analysts and shipping sources said, as strong Chinese demand and tanker fleet expansion helped the OPEC member dodge sanctions.

Exports rose to around 1.4 million barrels per day (bpd) in December, according to two industry sources and shipping and customs data compiled by Reuters on a country-by-country basis and corroborated by other sources and consultants.

The sources said they expected exports to dip in January from the December peak ahead of new US sanctions.

Western sanctions aimed at curbing Iran’s disputed nuclear programme halved Iran’s oil exports in 2012 from 2.2 million bpd in late 2011, leading to billions of dollars in lost revenue and a plunge in the Iranian currency.

But continuous robust demand from top buyer China and others such as India and Japan, as well as the purchase of new tankers, allowed the Islamic Republic to unexpectedly boost exports late last year.

Salar Moradi, oil market analyst at oil and gas consultancy FGE, estimated that Iran shipped more than 1.4 million bpd of crude oil in December and forecast that exports would remain between 1.1 million and 1.3 million bpd in the first quarter of 2013.

This represents an increase from a low point of less than 900,000 bpd in September and suggests monthly revenues worth approximately $4.7 billion based on December Brent prices.

“They [Iran] bought a number of tankers from China and can now do more deliveries ... It’s taken some pressure off Iran and facilitated tanker traffic and we are seeing higher exports to China,” he told Reuters this week.

Chinese data showed the country bought 593,400 bpd of Iranian crude in December, the second-highest level of daily imports in 2012, a rise that Chinese officials also attributed to an easing of shipping delays.

Previously, Iran’s tanker fleet had struggled to meet delivery schedules to China because EU measures in July barred Europe-based insurers from covering tankers that carry Iranian oil.

“China is saying let’s up the numbers because no one is doing anything about it, and it looks like Obama has made a political decision not to go to war with Iran,” said a senior source with a large independent trading house, referring to US President Barack Obama.

Gulf News
Business Editor's choice
Quick Access

  1. Markets

  2. Economy

  3. Property

  4. Aviation

Business Top Stories

  1. Sina Weibo shares jump 19% in US debut

  2. Muscle cars out in force at New York auto show

  3. Faster Wi-Fi on flights leads to sky battle

  4. How to conduct yourself during an exit interview

  5. SME law to boost business climate of this sector