Japan, South Korea, India, and China are all buying Iranian crude once again, but at much lower rates than they did before November when U.S. sanctions kicked in, S&P Global Platts calculations reveal.
All four countries, along with another four, were granted sanction waivers for a period of 180 days, with China and India only lowering their intake of Iranian crude, while Japan and South Korea suspended Iranian oil imports ahead of the sanctions.
According to the S&P Global Platts calculations, the rate at which India, Japan, and South Korea are importing Iranian crude at the moment, is at least half lower than the rate from before the sanctions went into effect.
India and China are Iran’s largest crude oil buyers, accounting for 80 per cent of the country’s oil exports to Asia, which, in total, constituted half of Iran’s overall oil exports.
India’s crude oil imports from Iran dropped 63 per cent to 0.86 million tonnes in December, the lowest recorded in calendar year 2018, according to latest data from Directorate General of Commerce Intelligence and Statistics (DGCIS).
India had imported 2.32 million tonnes of Iranian crude in December 2017. Cumulatively, oil imports from Iran during the April-December 2018 period increased 18 per cent to 19.75 million tonnes, as compared to 16.65 million tonnes imported in the corresponding period a year ago.
S&P Global Platts analysts expect Iran’s oil exports to fall to 1.2 million bpd over the first four months of 2019, and further slump to 860,000 bpd in the fourth quarter of the year.
There has been talk among analysts that Washington will probably grant waiver extensions to Iran’s biggest Asian clients who would apparently find it difficult to replace the cheap supplies of Iranian crude with alternative sources cost-efficiently.
India’s crude oil imports from Iran have been declining since November after US’ secondary sanctions targeting Iran’s energy sector came in effect.
Meanwhile, India’s oil imports from Saudi Arabia, the largest producer of Organization of Petroleum Exporting Countries (OPEC), jumped by 53 per cent 3.02 million tonnes in December 2018.