China and India have increased their imports of Iranian oil following the easing of international sanctions, making them the two biggest importers of Iranian crude, according to Reuters.
The jumps indicate the OPEC member’s total sales in January to its four biggest buyers topped the 1 million barrels per day (bpd) level at which world powers want to keep shipments capped to maintain pressure on Iran to abandon its nuclear programme.
Tough sanctions have more than halved the country’s oil exports since early 2012, costing Tehran billions of dollars in lost revenue every month.
Yet, last month’s rise may not signify a continuing flood of Iran’s oil as shipments may have risen due to one-off factors. India was able to take more because it earlier cut purchases the most among Tehran’s top clients; China’s jump was partly linked to distortions in the data ahead of the Lunar New Year holiday.
“I don’t expect to see shipments to Asia rising back to pre-sanctions levels soon. It’s premature to say given the ongoing negotiations, but I don’t think Iran can come back until a further political deal is reached,” Alex Yap, energy consultant at FGE Singapore, told Reuters.
Six world powers and Iran made a “good start” in talks in Vienna towards reaching a final settlement in the decade-old stand-off over Tehran’s nuclear programme, but conceded their plan to get a deal in the coming months was very ambitious.
An earlier agreement in November allows the OPEC member to keep exports at the current reduced levels of about 1 million bpd, less than half the pre-sanctions level.
The Geneva deal also exempts buyers of Iranian oil – most of whom are based in Asia – from continually reducing purchases to win sanction waivers every six months from the United States.
January’s rise in shipments is in line with data on Iran’s exports showing shipments rose three months in a row to close to 1.2 million bpd in January, according to sources who track tanker movements.
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