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
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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.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.