Reuters: China's crude oil imports from Iran in June halved from a year ago to its lowest monthly level in 18 months, contributing to the overhang of crude stored offshore in Iran, official customs data showed on Tuesday.
BEIJING (Reuters) – China's crude oil imports from Iran in June halved from a year ago to its lowest monthly level in 18 months, contributing to the overhang of crude stored offshore in Iran, official customs data showed on Tuesday.
Iran shipped 1.176 million tonnes, or 286,000 barrels per day (bpd), of crude to China last month, 50 percent less than in June 2007, data from the General Administration of Customs showed.
This is also well below the 400,000 bpd of term volumes officially contracted for this year, and the even higher 465,000 bpd average imports of Iranian crude for the first quarter.
Lower exports of Iranian crude to China during the past few months were one of the reasons why Iran had to store crude offshore, at one point holding 30 million barrels in 15 Very Large Crude Carriers, a Beijing-based state oil trader said.
The lower Iranian supplies came after some refineries cut back on costlier Iran Light crude to trim deep refining losses aggravated by state-capped domestic fuel prices, the trader said.
"Refineries are getting really picky as pressure is so huge to cut losses," said the trader familiar with Iranian supplies.
Iran, the world's fourth-largest oil exporter, cut the price of its heaviest crudes for the second quarter, and subsequently set them at record discounts to Asian benchmarks Oman and Dubai for July and August.
But it also raised the price of Iran Light throughout the second quarter.
The Iran Light OSP rose from a $1.60 premium to Oman/Dubai in March to a $2.25 premium in June.
Iran is China's third-largest crude supplier after Angola and Saudi Arabia.
Top refiner Sinopec Corp, China's sole end user for Iranian crude, last week warned investors that its first-half earnings could fall more than half as soaring crude and state-set price caps pushed its refining business deep into the red.
June was the second month in a row that Iranian crude imports fell below year-ago levels, with May imports down almost 3 percent from May 2007.
Traders cautioned against reading too much into one month's data as factors such as weather conditions and port congestions could have skewed customs clearances on a monthly basis.
Oil Minister Gholamhossein Nozari said earlier this month Iran was holding less than 20 million barrels of crude in floating storages, down from an estimated 30 million barrels in May, and this oil would be sold within one-and-a-half months.
But Iran was seen seeking a double-hulled supertanker to store crude oil for up to 60 days on Monday, suggesting that it had yet to sell all its stored crude.
Chinese refiners meantime boosted June imports from Saudi Arabia by two-thirds and by nearly one-third from Angola versus a year ago, and also sharply raised purchases from smaller suppliers like Kuwait and faraway seller Venezuela.
(Reporting by Chen Aizhu; Editing by Maryelle Demongeot and Ramthan Hussain)