China International United Petroleum & Chemical Corp. (QRAHVZ), the nation’s biggest oil trader, is still negotiating a 2012 crude supply contract that was scheduled to be agreed on last year with National Iranian Oil Co., according to two people with knowledge of the talks.
The contract between China International, known as Unipec, and NIOC should have been completed by the end of December, according to the people who declined to be identified because the information is confidential. Huang Wensheng, a Beijing-based spokesman for China Petroleum & Chemical Corp., Unipec’s parent company, declined to comment on the talks. Nobody answered three calls and an e-mail to NIOC’s press office in Tehran.
China is under pressure from the U.S. to reduce Iranian crude purchases as the West seeks to use sanctions to curb the Middle East country’s oil revenue and force it to abandon its nuclear program. The Asian nation is the world’s biggest buyer of Iran’s oil, accounting for 22 percent of its exports, according to the International Energy Agency.
Unipec is the second-biggest Chinese buyer of Iranian crude behind Zhuhai Zhenrong Co., according to Facts Global Energy, a Singapore-based consultant. The trader purchases more than 200,000 barrels a day, according to a Dec. 19 report by Facts. China imported 556,000 barrels a day of Iranian oil from January to November last year, according to data compiled by Bloomberg, accounting for 11 percent of the country’s total imports.
Buyers and sellers of crude under annual contracts typically agree on terms for oil purchases in the preceding year. Chinaoil, the international trading unit of PetroChina Co. completed its 2012 supply contract with Iran at the end of last year, according to a company official who declined to be identified because the information is confidential.
The U.S. tightened economic sanctions against Iran over its nuclear program on Dec. 31, and the European Union is weighing a ban this month on purchases of Iranian crude. U.S. Treasury Secretary Timothy F. Geithner arrives in Beijing today, where he will urge the government to cut imports of Iran’s oil.
The Middle East country, OPEC’s second biggest producer, has threatened to block the Strait of Hormuz in response to U.S. and European sanctions. The waterway carries 17 million barrels of crude a day, according to the U.S. Energy Department, almost 20 percent of global consumption.
Unipec charted the oil tanker Yuan Yang Hu in December to ship crude from the Middle East to China. The Very Large Crude Carrier, capable of carrying as much as 2 million barrels, loaded at Iran’s Kharg Island after Dec. 31, according to shipping data compiled by Bloomberg. It is scheduled to arrive at Caofeidian on Jan. 23.
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