Iran’s oil shipments to China fell for a fourth month in March to the lowest in 22 months amid delays in signing term supply contracts.
Imports by the biggest buyer of Iranian crude fell 6.2 percent to 1.08 million metric tons, or about 254,000 barrels a day, according to calculations by Bloomberg from data released via e-mail today by the Beijing-based General Administration of Customs. Supplies from the Persian Gulf nation averaged 557,413 barrels a day last year.
Purchases from Iran slid as China International United Petroleum & Chemical Co., the nation’s biggest oil trader, put off signing a 2012 term contract with National Iranian Oil Co. after a disagreement over payment terms. The issues were largely resolved by the end of February, according to three people with knowledge of the talks. The decline in imports also comes as the U.S. and European Union enacted new sanctions to raise pressure on Iran to abandon any illicit nuclear program.
“China’s Iran oil imports will continue to go down, slowly,” Gordon Kwan, Hong Kong-based head of regional energy research at Mirae Asset Securities Ltd., said by e-mail. “It’s also in the interest of national energy security for China to diversify its sources of oil imports regardless of prices.”
The Strait of Hormuz, between Iran and Oman, is where oil tankers exit the Persian Gulf, a transit point for about 20 percent of the world’s oil. Iran has threatened to blockade the strait in retaliation for EU and U.S. sanctions.
China paid $118.70 for each barrel of crude it bought from Iran in March, up from $112.21 in February, according to Bloomberg calculations from today’s data. The 6 percent reduction in import volumes follows a 45 percent cut in February from January.
The Obama administration wants China to present specific plans of how it will curtail Iranian oil imports, saying past cuts aren’t enough to win them an exclusion from new U.S. sanctions. If a country doesn’t prove it’s making necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system.
Iran slid one place to become the eighth-biggest source of Chinese crude imports in March compared with a month earlier, according to the data. It was the third-largest supplier in 2011 after Saudi Arabia and Angola.
Chinese imports of Saudi crude were 3.95 million tons in March, followed by 3.63 million tons of oil from Angola, according to the data. Iraq was the seventh-biggest supplier at 1.16 million tons.