China continues buying Iranian LPG despite U.S. sanctions

June 19, 2019

TEHRAN – China is still importing liquefied petroleum gas (LPG) from Iran after the U.S. imposed sanctions on the country’s oil industry, Bloomberg reported citing the Paris-based energy researcher Kpler SAS.

According to Ship tracking data, Kpler estimates that at least five supertankers loaded Iranian LPG in May and June heading for China.

That would equate to around $100 million of the gas, according to Bloomberg calculations.

Chinese buyers turned to Iran after Beijing slapped a 25 percent tariff on the gas imports from U.S. last August as the trade tussle heated up between the two nations. 

Iran accounted for around a third of imports in April, before Donald Trump imposed new sanctions on the country in May, aiming to block its energy exports.

To avoid running afoul of the U.S. sanctions, LPG importers in Asia’s largest economy would have to turn to more expensive supplies from elsewhere in the Middle East or Africa.

Some reports say that China could also be importing Iranian oil, so that FACTS Global Energy Group (FGE) last week said in a note that it expects some degree of non-compliance with the U.S. sanctions.

China probably isn’t complying with U.S. sanctions on Iranian crude, U.S. Deputy Energy Secretary Dan Brouillette said Friday, adding that he didn’t have any hard evidence to show this.

LPG is one of the important oil products that Iran exports to its destination markets. According to Energy Information Administration data, in 2017, some 83 percent of the country’s 507,000 barrels a day of petroleum product shipments were LPG and fuel oil.

EF/MA

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