** FILE ** Iranian oil technician Majid Afshari checks the oil separator facilities in Azadegan oil field, near Ahvaz, Iran. (AP Photo/Vahid Salemi) Image Credit: AP

Tokyo: Iran’s biggest clients took in a quarter more oil in the first six months of 2014 than in the same period of last year, with China and India holding to the higher volumes they started after the agreement that relaxed Western sanctions on Tehran.

Iran’s exports to its top four oil buyers — China, India, Japan and South Korea — may keep rising even though a deadline for a final deal on its disputed nuclear programme had to be extended. The lead US nuclear negotiator on Tuesday said participants aim to reach a resolution on the decade-old dispute by the end of the four-month extension.

Iran last week received the final instalment of the $4.2 billion in oil payments released as part of the earlier agreement, although another $2.8 billion was released as part of the extension.

“From this point forward, we expect more upside than down with respect to Iranian crude exports to Asia with the caveat that talks don’t collapse completely,” said James Davis, a consultant at Facts Global Energy.

“We see an extra 500,000 barrels per day (bpd) of crude production from Iran by end-2015 as very possible,” he said.

The four Asian buyers imported 1.2 million bpd in the first half of 2014, versus 961,236 bpd in the same period a year ago, according to official customs data and tanker arrival schedules.

China, Iran’s biggest customer, raised its imports by almost 50 per cent in the first half, while India increased its purchases by a third.

Purchases by Japan and South Korea fell over the same period.

“China and India will keep testing what they can get away with before serious objections are raised,” Davis said.

Iran and six world powers agreed to extend nuclear talks by four months after they failed to reach a July 20 deadline for a permanent resolution. Under the interim agreement, Iran’s crude exports were supposed to be held just above 1 million bpd.

Shipments higher than that haven’t drawn serious criticism from Washington so far, partly because the increased volumes are made up mostly of condensate, a light oil US officials say is allowed under the sanctions law.

In June, imports by Iran’s buyers in Asia fell nearly a fifth from the previous month to just over 1 million bpd, the lowest daily rate since December.

Asia’s imports of Iranian oil in the first five months of 2014 had held steadily above 1.1 million bpd, excluding Iran’s exports to destinations such as Turkey and Syria.

Any further significant increases in output from Iran may put pressure on Saudi Arabia to cut production, Davis said.

“More production from Iran will put pressure on other Opec members ... which essentially in the short term means Saudi Arabia reducing output,” he said.

China’s imports rise

China’s imports of Iranian oil rose 38 per cent in June from a year earlier to 531,200 bpd, although they were down from May’s posting of the second-highest level on record at 757,900 bpd. China’s intake jumped nearly 50 per cent in the first six months of the year to 627,700 bpd.

India’s imports increased by almost 19 per cent to 167,300 bpd last month from a year earlier, but were down from 221,600 bpd in May. Imports from Iran to India were up by a third to 281,000 bpd between January and June.

South Korea’s imports of Iranian crude rose over 7 per cent in June from a year earlier to 145,800 bpd. In the first six months of 2014, they were down by 11 per cent at 124,657 bpd.

Shipments to Japan, the last of the four to report oil imports, rose by 46.8 per cent to 188,685 last month, trade ministry data showed on Thursday. For the first half of the year, Japan’s imports from Iran were at 172,154 bpd, down 7.4 per cent from a year earlier.

Japan and South Korea are Washington’s most important allies in Asia and have been the keenest to show they are toeing the line on sanctions.