| Kippreport.com

China and India slash oil import from Iran

August 22, 2012 8:40 by Reuters

New Delhi has approved just a few cargoes delivered on ships and insurance arranged by Iran, as it wants to keep business for its own companies. But Indian shippers are reluctant to make the journey as there is only limited insurance available and the freight rate for one domestic ship booked so far was very high.

CUTS BY DEFAULT OR DESIGN?

China’s imports in the first seven months stood at 433,450 bpd, or 22 percent below levels a year ago, principally because of sharp first-quarter cuts made as Beijing and Tehran wrangled over contract terms.

The average of June and July imports was around 540,000 bpd, and China will lift at near full contract volumes of about 510,000 bpd for July and August, industry officials told Reuters this month. Iran will provide shipping and third-party insurance and supply China on a delivered basis.

India’s refiners have struggled to import from Iran because they are largely reliant on New Delhi’s case-by-case approval. Privately-run Essar’s imports from Iran rose by a third in July to 154,400 bpd compared with June, the data showed.

Essar renewed its 100,000 bpd deal with Iran for this fiscal year starting April 1 but plans to lift 15 percent less volumes. State-run MRPL, previously Iran’s biggest Indian client, has reduced the size of its deal to 100,000 bpd compared with 124,000 bpd of 2011/12.

MRPL lifted only a fifth of the volumes it planned from Iran in July because of insurance and shipping issues and is topping up shortfalls through spot tenders and increased volumes from suppliers such as Saudi Arabia and the United Arab Emirates.

China and India’s shipments from Iran in July were also lower than a forecast by Geneva-based oil consultancy Petro-logistics, which pegged China’s July-arriving purchases at 590,000 bpd.

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Tags: China, India, Iran