Iran General NewsOil buyers cut more Iran imports due to sanctions

Oil buyers cut more Iran imports due to sanctions


Reuters: Japan will slash crude purchases from Iran in April, and European and Taiwanese customers will also take less, industry sources told Reuters on Wednesday, adding to signs Western sanctions are curbing sales from OPEC’s second-largest producer. By Osamu Tsukimori and Alex Lawler

TOKYO/LONDON, April 18 (Reuters) – Japan will slash crude purchases from Iran in April, and European and Taiwanese customers will also take less, industry sources told Reuters on Wednesday, adding to signs Western sanctions are curbing sales from OPEC’s second-largest producer.

Japan is cutting volumes by almost 80 percent in April compared with the first two months of 2012. The cuts, amounting to 250,000 barrels per day, are the steepest yet by the four Asian nations that buy most of Iran’s 2.2 million bpd of exports.

In Europe, Iran’s oil buyers are progressively cutting volumes in advance of a European Union ban on Iran crude from July 1 and have reduced their April purchases by 75,000 bpd, industry sources said on Wednesday.

“People are trying to diversify their supplies and to prepare for July,” said a trader at a European oil company no longer buying Iranian crude.

Europe and the United States are trying to squeeze the revenues Iran makes from its oil exports to force it to halt a nuclear programme they fear will be used to make weapons, but which Tehran says is for power generation.

The tightening sanctions on Iran are making it tougher to pay, ship and insure its oil. The measures have helped to drive a rally this year in oil prices, which in March hit $128 a barrel, the highest since 2008.

Japanese buyers will load just 75,000 bpd of oil from Iran in April, trade sources said, down 77 percent from average imports of 322,900 bpd in the first two months of the year. Customs data is not yet available for March.

Taiwanese state-owned oil firm CPC Corp is also reducing imports from Iran, its chairman said on Wednesday. The company will follow the schedule of U.S. sanctions in deciding when to cut them completely.

The industry sources in Asia and Europe declined to be identified because they are not authorised to talk to the media.


Last year at least 10 tankers a month called at Iranian ports to lift oil for Japan. In April, three or four tankers are expected to load, traders said.

Japan’s biggest buyers of Iranian oil, Showa Shell Sekiyu KK and JX Nippon Oil & Energy Corp, are likely to load four cargoes amounting to 2.25 million barrels in April, the sources said, with shipments arriving this month and next.

Both companies declined to comment.

EU measures ban Europe’s insurers, the providers of around 90 percent of the world’s tanker insurance, from providing cover to Iranian oil exports anywhere in the world, and Japanese insurers have also imposed their own shipping restrictions.

The EU sanctions on insurance apply to new oil contracts struck since Jan. 23, and to all contracts after July 1. Japan’s Iranian oil buyers are in negotiations to renew annual contracts that run from April through March each year.

Switzerland’s Economics Ministry, meanwhile, said it would make a decision on a ban on Iranian oil imports at a later date, leaving open a loophole that may allow Swiss-based oil trading companies to bring Iranian oil into Europe.

Japan and South Korea have lobbied for exemptions to allow them to continue shipping reduced volumes of crude, but insurance and shipping executives say a complete ban now looks likely.


In the second half of 2011, Japan cut between 15 and 22 percent of its oil imports from Iran, which was enough for the United States to grant it a waiver from sanctions.

Refiners and traders have continued to cut their annual contracts.

Sources said top importer Showa Shell had reduced the volume of oil it will import from Iran under an annual deal the company renewed in April. One source said the cuts may range between 15 and 20 percent from last year’s 100,000 bpd contract, but exact details were not available.

JX Nippon Oil & Energy Corp, Japan’s biggest oil refiner, has not renewed a contract to buy 10,000 bpd of Iranian crude, which expired in March. JX has another contract for 80,000 bpd of crude from Iran, which was renewed in January.

China, Japan and South Korea have together cut imports from Iran by 22 percent in the first two months of the year from a year earlier, according to data compiled by Reuters.

European buyers that have reduced Iranian imports are filling the void with a range of replacement barrels from top world exporter Saudi Arabia as well as Iraq and Russia.

Top Spanish oil refiner Repsol has stopped importing crude from Iran and has replaced most of that supply with Saudi Arabian oil, a company spokesman said on April 10. Saudi Arabia is OPEC’s largest producer. (Additional reporting by Florence Tan, Jonathan Standing, Miaojung Lin, Peg Mackey; Editing by Jane Baird)

Latest news

Iran’s Unsolvable Air Pollution Problem

Air pollution will remain at dangerous levels and will increase for the next few days in most big cities,...

The World Must Acknowledge the Iranian People’s Right to Self-defense

Victor Hugo once said: “When dictatorship is a fact, revolution becomes a right.” Throughout history, this has been the...

Iran: 60% Of Population Is Poor

The livelihood baskets of the Iranian people are shrinking dramatically. This, in turn, has introduced new concerns to protect...

The implications of EU’s terrorist designation of the Revolutionary Guards (IRGC)

The European Parliament called on January 18 for the European Union to list Iran's Revolutionary Guards (IRGC) as a...

Iran’s Regime Is Hiding Human Rights Violations In Its Prisons

With more than four months into Iran’s latest round of nationwide uprisings, the brutality of the Iranian regime’s security...

How Internet Censorship Is Damaging Iran’s Economy

While in the last four months, internet access in Iran has been cut off or severely limited, the regime’s...

Must read

New bid to stifle Iran aid to Syria

Wall Street Journal: U.S. officials have uncovered an effort...

You might also likeRELATED
Recommended to you