China’s purchase of Iranian oil more than before sanctions

March 2, 2022 - 14:33

TEHRAN- China's purchases of Iranian oil have risen to record levels in recent months, exceeding a 2017 peak when the trade was not subject to U.S. sanctions, tanker tracking data showed, Reuters reported on Tuesday.

Chinese imports exceeded 700,000 barrels per day (bpd) for January, according to estimates of three tanker trackers, surpassing the 623,000 bpd peak recorded by Chinese customs in 2017 before former U.S. President Donald Trump reimposed sanctions in 2018 on Iranian oil exports.

One tracker estimated imports amounted to 780,000 bpd in November-December on average.

The ramping up of the purchases by the world's top oil importer comes amid talks between Tehran and world powers to revive a 2015 nuclear deal that will lift U.S. sanctions on Iranian oil exports. The talks have intensified in recent weeks.

A return of Iranian oil will ease tight global supplies and cool crude prices that have touched $100 a barrel following Russia's invasion of Ukraine.

Iran is expected to have a strong comeback to the global market in case the nuclear deal is revived and the U.S. sanctions on the country are lifted, Bloomberg reported on February 25.

According to the report, considering the capacity of Iran’s offshore oil storages, the Islamic Republic will be able to inject millions of barrels of oil into the market as soon as the sanctions are lifted, without the need for boosting the current level of production.

Asian countries including South Korea are likely to be among the first in line to ship in Iranian cargoes.

Bloomberg puts the estimation of the crude oil stored at Iranian stationary tankers at 65 to 80 million barrels, citing the data intelligence firm Kpler.

About four-fifths of the stored crude is condensate, a super-light oil that’s a by-product of natural gas extraction. The overall Iranian volume is higher if crude that’s already in transit is included, the report said.

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