China’s Iran oil imports to rebound in December as buyers use US waivers

Sinopec resumed Iran oil imports shortly after Tehran’s biggest crude buyer received its waiver in November. (Reuters)
Updated 07 December 2018
0

China’s Iran oil imports to rebound in December as buyers use US waivers

  • China’s waiver on US sanctions allows it to buy 360,000 barrels per day (bpd) of oil for 180 days
  • For November and December, Iranian Heavy crude sold to Asia has been priced at $1.25 a barrel below Saudi’s Arab Medium

Beijing/Singapore: 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 US sanctions on Iran, according to industry sources.

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.

It was reported in November that China’s waiver on US 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 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.

“We continued lifting Iranian oil in November because we received the waiver,” the second source added.

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 toward 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 tons (247,260 bpd) in October, the lowest since May 2010, Chinese customs data shows. Data from the provider Refinitiv Eikon, however, shows that 2.77 million tons 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 tons, the Eikon data showed. A total 2.51 million tons 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 US sanctions waivers expire around the start of May.


Egyptian economy on right track after 5.6% growth in 2018-2019: prime minister

Updated 17 July 2019
0

Egyptian economy on right track after 5.6% growth in 2018-2019: prime minister

  • Egypt is emerging from a three-year economic reform program tied to a $12 billion loan from the IMF
  • Egypt has been praised by international lenders for swift reforms implemented since 2016

CAIRO: Egypt’s economy grew 5.6 percent in the 2018/19 fiscal year and is “on the right track” as it completes IMF-backed reforms, Prime Minister Mustafa Madbouli said on Wednesday.
The budget deficit came in at 8.2 percent of GDP, he said, which was slightly below an official forecast of 8.4 percent.
Egypt is emerging from a three-year economic reform program tied to a $12 billion loan from the International Monetary Fund.
Madbouli said Egypt’s primary surplus stood at 2 percent for the fiscal year, which ended in June, and also pointed to a recent drop in inflation as positive signs. Economic growth was up from 5.3 percent in 2017/18 and in line with a government forecast.
“At the same time, it induces us to complete the implementation of reforms and the efforts exerted to achieve the targets for the new fiscal year,” Madbouli said in a statement said.
Egypt has been praised by international lenders for swift reforms implemented since 2016, though austerity measures and inflation have left many Egyptians struggling to get by.
The reforms included a sharp devaluation of the currency, the introduction of value-added tax and the elimination of subsidies on most fuel products.
Headline annual inflation dropped to 9.4 percent in June from 14.1 percent the previous month, though it is expected to rise over the rest of the summer as the impact of the latest round of fuel subsidy cuts kicks in.