China set to take more Iran oil

Gulf Times ^ | 6/11/2014 | Reuters

[thackney]

China is set to take more Iranian crude than it did before tough sanctions were put in place in early 2012, as Asia’s biggest refiner Sinopec Corp buys more oil from the Middle East nation, sources with direct knowledge of China’s buying strategy said.

Western sanctions over the past few years had reduced Iran’s crude shipments to less than half and crippled its economy by choking the flow of petrodollars. Some of those measures were eased following a breakthrough diplomatic deal last November in return for Tehran curtailing its nuclear programme. Higher purchases by Chinese state refiner Sinopec mean Iran’s top clients - China, Japan, India and South Korea - are expected to jointly import around 1.25mn-1.3mn bpd in the January-June period, according to five industry and government sources with knowledge of oil sourcing in these countries.

“Over the past two years Sinopec had reduced purchases. That was purely because of sanctions,” said an industry official with knowledge of the refiner’s supply plans. “Now that the pressure is eased, they are making the most of it.”

Asked to comment on imports of Iranian oil since late last year through to the first half of 2014, Sinopec spokesman Lu Dapeng said the firm’s “crude purchases are made based on their commercial requirement and the requirement for production.”

Six major powers - the US, Britain, Germany, France, Russia and China - and Iran are trying to reach a final settlement on Tehran’s nuclear programme, although diplomats say a July 20 deadline is likely to slip.

China is likely to import about the same volume of oil in May and June as it did in the first four months of the year, when it took on average of around 620,000 bpd compared with pre-sanctions volumes of around 550,000 bpd.

[thackney]

excerpted for Reuters content

[thackney]

China’s Record Oil Hoarding Seen Keeping Crude Above $100
http://www.bloomberg.com/news/2014-06-11/china-s-record-oil-hoarding-seen-keeping-crude-above-100.html

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China oil giant to increase production from Iranian oil fields
https://www.zawya.com/story/China_oil_giant_to_increase_production_from_Iranian_oil_fields-ZAWYA20140612065600/

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China’s Sinopec doubles oil output at Iranian project: sources
http://www.tehrantimes.com/economy-and-business/116234-chinas-sinopec-doubles-oil-output-at-iranian-project-sources

China Petroleum & Chemical Corp., or Sinopec, has doubled production at its Iranian oil project, according to people familiar with the matter.

The push is part of a broader attempt by China and Iran to mend fences after the cancellation of a $2.5 billion oil-field deal with another Chinese state-owned giant, China National Petroleum Corp.

Production at the Sinopec-run Yadvaran project, near the Iraqi border, has increased to about 50,000 barrels a day from 25,000 barrels a day

[allendale]

China bitterly resents US involvement in Asian affairs. It considers itself as the preeminent power and will ignore sanctions at its convenience. China views Iran as a source of energy and it eighty million citizens as a good market for its export oriented economy.

[cripplecreek]

Sanctions are a joke at this point anyway. Between our state department and the UN we hand out waivers to the right cronies and look the other way.

[thackney]

I think sanctions have helped to drive the demand for Iran’s oil to the point that their production is at a 20 year low.

http://www.eia.gov/countries/country-data.cfm?fips=IR#pet

[Owen]

Explosive Chinese consumption growth guarantees perpetual scarcity.

A “fair” level of Chinese per capita oil consumption — mapped to US per capita consumption, would be 64 million bpd, up from their present 10.

India would be another 64 million.

There is nowhere to get that other than from US consumption.