Is Asia doing enough to curb Iranian oil purchases?

Dec 03 2012, 13:45 IST
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Asia's buyers of Iranian crude believe they've cut their purchases from Tehran enough.  (Reuters) Asia's buyers of Iranian crude believe they've cut their purchases from Tehran enough. (Reuters)
SummaryAsia's buyers of Iranian crude believe they've cut their purchases from Tehran enough.

Asia's buyers of Iranian crude believe they've cut their purchases from Tehran enough to justify an extension of their U.S waivers, and strictly speaking, they probably have.

The United States this week will likely announce whether China, India and South Korea will join Japan in receiving exemptions allowing them to continue buying Iranian crude.

But even if the waivers are renewed, the question for lawmakers in the United States and Europe is whether they should be asking Asia to do more in their battle against Iran's nuclear programme, which they fear is aimed at developing weapons despite Tehran's insistence it is only for electricity.

Looking at the numbers, only India would have cause for concern as its purchases from Iran are actually up 7.1 percent in the first 10 months of the year from the same period in 2011.

India bought 366,400 barrels per day (bpd) from Iran in October, up 14 percent from September and 17 percent from a year earlier.

This was even up from the 328,400 bpd for the first 10 months of the year, ensuring that India remains the top buyer of Iranian oil behind China.

Indian officials will point to the fact that in the first seven months of the contract year that started in April, imports from Tehran are down 12 percent from the same period a year earlier.

While this does show India's refiners have made some effort to cut purchases, the big jump in October imports doesn't look good if they are trying to convince the Americans they really are an ally against Tehran.

Even the Chinese, who have made it quite clear they don't support the concept of sanctions targeting Iran's oil trade, have made deeper cuts than the Indians.

In the first 10 months of 2012, China imported 424,000 bpd from Iran, a drop of 22.2 percent from the same period last year.

However, how much of this was due to a genuine willingness of the Chinese to at least cooperate with the United States is open to debate.

It's quite possible that China's drop in purchases is more down to the dispute over contract terms at the start of the year and the later insistence that Tehran uses its own tankers to deliver cargoes after European insurers withdrew coverage for vessels carrying Iranian crude.

South Korea has the strongest case for the renewal of its waiver for Iranian crude,

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