(Reuters) – China’s crude oil imports from Iran expanded 38 percent in June from a year ago, although the shipments were also at their lowest level in four months, customs data showed on Monday.
Imports in the first half of 2014 were up 48 percent over the same six months of the previous year.
China, Tehran’s largest oil client, began stepping up purchases from the OPEC member after a preliminary nuclear deal in November of last year eased some sanctions on Iran. China has been making up the main portion of Asia’s higher Iranian oil imports since then.
Asian buyers are expected to import about 1.25 million to 1.3 million barrels per day (bpd) of Iranian oil in the first half of the year, mostly owing to China’s increases, industry and government sources have said.
Negotiations between Iran and six world powers over a comprehensive nuclear deal have been extended for an additional four months past a self-imposed deadline of July 20.
Despite the slow progress on a long-term deal to end the decade-old nuclear standoff, Iran has moved to eliminate its most sensitive stockpile of enriched uranium gas, in keeping with the interim agreement, according to an update by the U.N. nuclear watchdog obtained by Reuters.
China’s June imports from Iran came in at 2.18 million tonnes, or 531,200 bpd, falling 30 percent from 757,900 bpd in May. Imports from Iran for the first half of the year were 627,742 bpd, compared with 424,183 a year ago.
“It’s very difficult to say on the monthly numbers, because there is a kind of volatility that you get from month to month,” said Neil Beveridge, senior oil analyst at Sanford C. Bernstein in Hong Kong. “It’s still very significantly up year-to-date.”
China’s imports from Iran spiked to a record in April and remained high in May. June’s figures are on par with last December through to March of this year, still near the pre-2012 levels before tougher Western sanctions were imposed.
Top state refiner Sinopec Corp has been lifting more Iranian oil since last year partly because it is cheaper versus similar grades from Saudi Arabia, industry officials have told Reuters.
The Sinopec increases helped lift imports from Iran and were a result of both a push to cut crude procurement costs and the easing of sanctions, the officials said.
Higher imports of condensate, a light crude oil from Iran’s South Pars gas project, have also contributed to strong intake figures. China counts condensate as crude oil.
Iran’s overall crude oil exports dropped in June after a spike in May, yet sales were still above the 1 million bpd level allowed by an interim deal aimed at curbing Tehran’s nuclear programme, according to sources who track tanker movements.
Iran ranks No.3 among China’s top suppliers, according to customs, with growth in the January-June period the fastest among China’s top suppliers, outpacing that of Iraq, Oman, Angola, Russia and Saudi Arabia.
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