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China’s purchase of Iranian crude down 37%

China’s crude oil imports from Iran dropped by roughly 37% in November, but the Asian giant remains the main destination for Tehran’s sanctioned crude exports, and shipments are expected to rise, Kallanish Energy reports.

According to data from online shipping monitoring service, TankerTrackers.com, some 517,143 barrels per day (Bpd) of Iranian crude went to China in November. This is a 44.85% share of total Iranian exports last month, but a large drop compared to the 820,363 Bpd imported in October.

As U.S. sanctions targeting Iranian oil exports became effective Nov. 5, China, along with other seven buyers, received a waiver allowing them to continue buying oil from Iran for 180 days. Beijing is reportedly allowed to buy as much as 360,000 Bpd with the sanction waivers.

Industry sources said last week Chinese oil giants Sinopec started using its exemption in November and CNPC would do the same in December, lifting its own production from Iranian fields. It’s estimated at least 2 million barrels will be loaded in December, double the previous levels to help compensate for cuts made pre-sanctions.

Iranian heavy crude exported to Asia has been reportedly sold at a discount of $1.25/Bbl from Saudi Arabia’s Arab medium – a level not seen since 2004.

Overall, Iran’s oil exports are estimated to have dropped over 30% last month to average 1.15 Mmbpd, with the other major buyer, India, slashing imports by 63%.

TankerTrackers.com analysts said the monitoring of Iranian crude exports was “by far the most challenging” to date. That’s because of bad weather conditions impacting visibility and the fact Iranian vessels have traveled most of the month “in the dark,” not switching their AIS transponders on after roughly three days, as previously done.

The experts couldn’t identify some 403,088 Bpd that left Iranian waters last month, corresponding to 34.96% of total Iranian shipments.
Source: Kallanish Energy

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