December 7, 2018 / 8:13 AM / 2 years ago

China's Iran oil imports to rebound in Dec as buyers use U.S. waivers

    * Oct Iran oil imports hit lowest since May 2010 - customs
    * Sinopec resume imports shortly after getting U.S. waiver
    * CNPC to load its share of Iran oil production in Dec
    * Sinopec, CNPC likely to use up 360,000 bpd of permitted

    By Chen Aizhu and Florence Tan
    BEIJING/SINGAPORE, Dec 7 (Reuters) - China's Iranian oil
imports are set to rebound in December after two state-owned
refiners in the world's largest oil importer began using the
nation's waiver from U.S. sanctions on Iran, according to
industry sources and data on Refinitiv Eikon. 
    Sinopec resumed Iran oil imports shortly after
Tehran's biggest crude buyer received its waiver in November,
while China National Petroleum Corp (CNPC)            will
restart lifting from its own Iranian production in December,
three sources with knowledge of the matter told Reuters. 
    Reuters reported in November that China's waiver on U.S.
sanctions allows it to buy 360,000 barrels per day (bpd) of oil
for 180 days. 
    Top Chinese energy group CNPC, which has invested billions
of dollars in Iranian oilfields, is ready to load its full share
of production from December, said an oil executive with direct
knowledge of CNPC's Iran activities. 
    The executive, who asked not to be named, estimated CNPC
will load at least two million barrels a month from December,
doubling previous levels to help compensate for cuts made before
sanctions on Iran's oil exports went into effect on Nov 5.
    Before the waivers had been announced, Sinopec, Asia's
largest oil refiner, had planned to stop loading Iran oil in
November, but resumed imports within days of getting the
exemption, a second source said, also asking to remain unnamed. 
    "We continued lifting Iranian oil in November because we
received the waiver," the second source said. 
    Sinopec and CNPC will likely use up the 360,000 bpd of
Iranian oil imports allowed to China under the waiver. 
    Another source said Iranian oil is "attractively priced"
versus rival supplies from the Middle East. 
    For November and December, Iranian Heavy crude sold to Asia
has been priced at $1.25 a barrel below Saudi's Arab Medium, a
discount not seen since 2004. 
    The source also said many Chinese refiners were geared
towards processing Iranian crude grades. 
    At 360,000 bpd, China's purchases would still be 45 percent
less than the average 655,000 bpd imported during the
January-September period. 
    The rise in Iranian oil supply and surging production from
the United States, Russia and OPEC countries has pulled down
crude oil prices by almost a third since October. 
    Ahead of the sanctions being implemented in early November,
China's crude oil imports from Iran fell to 1.05 million tonnes
(247,260 bpd) in October, the lowest since May 2010, Chinese
customs data shows. 
    Data from Refinitiv Eikon, however, shows that 2.77 million
tonnes of Iranian crude were discharged into Chinese ports in
October, including into bonded storage tanks in Dalian.     
    By December, China's Iran oil imports could reach almost 3
million tonnes, the Eikon data showed. A total 2.51 million
tonnes of Iranian crude were discharged into Dalian in October
and November, according to the data. 
    Other major Iranian oil buyers, including India, South Korea
and Japan, are also increasing or resuming orders.
    It is still not clear whether Iran will be able to export
much oil after the U.S. sanctions waivers expire around the
start of May. 
 Ship       Loading  Destination  Discharge status
 Dore       9-Nov    Shuidong     Discharged end-Nov
 Herby      3-Nov    Tianjin      Waiting for discharge
 Horse      9-Nov    Suanshan     Discharged in Dec 1
 Sea Cliff  8-Nov    Huizhou      Signal off after arriving
                                  Dec 1
 Dino I     3-Nov    Dalian       Floating near Xingang
                                  after arrival Dec 3
 Sabiti     20-Oct   Jinzhou      Discharged on Dec 3
 Daniel     1-Dec    Tianjin      Due to arrive late Dec
 Source: Refinitiv

 (Reporting by Chen Aizhu in BEIJING and Florence Tan in
SINGAPORE; Additional reporting by Jane Chung in SEOUL, Osamu
Tsukimori in TOKYO and Nidhi Verma in NEW DELHI; Editing by
Henning Gloystein and Tom Hogue)
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