countries reducing Import of Crude Oil from IRAN

[JAISWAL]

China cut Iran oil import as sanctions mount.
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China cut Iran oil import as sanctions mount

China will reduce crude imports from Iran for a second month, sources said on Thursday, as the two remain divided over payment terms for Iranian crude targeted by ever tougher international sanctions.

The dispute underlines the difficulty Iran will have selling its oil after European Union governments on Wednesday agreed in principle on banning its import and as new U.S. sanctions target payments for the country's crude.

It has been scouring the globe for replacements, snapping up February cargoes from Russia, the Middle East and Africa.

China is the top buyer of Iranian oil and also the fastest growing major oil importer, putting it in a strong position to negotiate for better terms after it more than halved January imports.

Refiners in number three buyer Japan on Thursday also expressed concern about being able to secure supplies of the Iranian oil, with the country's biggest refiner saying it is looking at possible alternatives.

The sticking point in talks is over the credit period. Top Chinese refiner Sinopec Corp, which processes around nine-tenths of China's Iranian oil imports, is insisting on 90 days to pay for imports, while Iran wants payment in 60 days.

Asked if there was any chance of agreeing a term supply contract by mid-January, normally the deadline for the two sides to fix February-loading cargoes, a second Beijing-based senior oil trader said, "I doubt it."

"Iranians may believe that with most of the terms agreed, it's a done deal. But the most essential term, the credit period, remains outstanding," said the first Chinese trader.

"They look at it as a half-full cup, we look at it as half empty."

Under the 2011 deal, Sinopec lifted a total of about 465,000 bpd Iranian oil in two contracts -- one via state trader Zhuhai Zhenrong Corp and one it signed directly with the National Iranian Oil Company, China-based oil industry sources have said.

Sinopec's purchases in 2011 included a first-ever term contract of South Pars condensate of about 75,000 bpd, but this was largely removed from January liftings and now in February as well, a third Chinese oil industry official told Reuters.

The Chinese refiner has instead bought condensate from Australia as well as other Asia Pacific suppliers.
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UPDATE 1-China extends Iran oil import cut as sanctions mount | Reuters

 

[JAISWAL]

Japan & South Korea seek to ease Iran oil ties

Japan and South Korea are seeking new suppliers of crude oil to lessen their dependence on Iran, in response to US pressure to stop buying from the country.

X Nippon Oil & Energy, Japan's biggest refiner, said on Thursday it was talking to Saudi Arabia and other countries to find alternative supplies of crude oil. One person close to the government said Koichiro Gemba, Japan's foreign minister, was using a visit to the Middle East to "pave the way to get more oil from Saudi".

South Korea also said it would reduce imports of Iranian crude.

US introduced sanctions last month to penalise financial institutions for dealing with Iran's central bank, which clears most oil sales. Countries that reduce their imports from Iran can receive a waiver from the sanctions.

Signalling reluctance to bow completely to US pressure, South Korea said it would "strengthen diplomatic efforts" to avoid big reductions. Kurt Campbell, the US State Department's top Asia official, said in South Korea that there was "anxiety in Seoul" over the US push.

The country's two main buyers of crude, SK Group and Hyundai Oilbank, said they had not received instructions to switch supply lines from Iran, but would do so if the government ordered.

Japan's refiners, which represent about 5 per cent of the world's total refining capacity, will be under pressure to follow JX's lead. Refiners have been steadily reducing the percentage of oil sourced from Iran over the past five years.
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Seoul and Tokyo seek to ease Iran oil ties - FT.com

 

[JAISWAL]

U.S. Joins EU Pressing to Cut Iran Oil Sales Over Nuclear Effort:-By Indira A.R. Lakshmanan and Asjylyn Loder
January 03, 2012 2:19 PM EST
Dec. 21 (Bloomberg) -- The Obama administration
and European governments are seeking help from
Arab and Asian allies to reduce Iran's oil revenues
in the dispute over its nuclear program, while
trying to avoid causing a surge in prices that may
threaten the global economic recovery.
The most wide-ranging effort to date to target
Iranian income, the strategy includes a push by France and Britain for an embargo as soon as next
month on imports of Iranian oil by the 27 European Union countries. EU nations, the U.S.
and Asia- Pacific allies discussed possible
measures in Rome yesterday, and vowed to
increase pressure on Iran, the world's No. 3 crude exporter in 2010, to abandon a suspected nuclear
weapons program, according to an Italian Foreign
Ministry statement.
The Obama administration sent high-ranking
officials to Saudi Arabia and Israel in the last few
days to discuss targeting Iran's energy exports,
and is developing plans to implement
Congressionally-mandated sanctions on its central
bank that complicate the international purchases of
crude. The U.S. is also urging Japan, the No. 2
buyer of Iran's oil, to reduce its reliance on
imports from the country and discourage refiners
from buying the crude by imposing tariffs,
according to diplomats and analysts who are in consultation with the administration.
"The ultimate goal is not to take every barrel of Iranian oil off the market, but to significantly
decrease the revenue Iran receives for its oil sales,"
said Mark Dubowitz, director of the Iran Energy
Project at the Foundation for Defense of
Democracies in Washington, who has been advising Congress and the administration on targeting Iranian energy revenues.
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U.S. Joins EU Pressing to Cut Iran Oil Sales Over Nuclear Effort - Businessweek

 

[JAISWAL]

India wants to pay for Iranian crude in rupees.
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NEW DELHI: Fearing that fresh US sanctions may block a six-month-old conduit used for paying for Iranian crude, India wants to pay its second largest oil supplier in rupees.

The issue is likely to figure prominently when a multi- disciplinary team visits Tehran on January 16 to discuss uninterrupted supply, a top government official said here.

India currently pays Iran about USD 1 billion every month through Turkey for the 370,000 barrels per day of crude oil it buys from the world's fourth-largest oil producer.

"There are chances that Turkey may come under pressure after a fresh round of US sanctions imposed on Iran," an official said.

Under the proposal, National Iranian Oil Co (NIOC) will open a rupee account with Indian banks and can use the money to purchase non-strategic items like railway imports and buying commodities. It cannot, however, use the money to invest in India or buy shares or companies.

A list of what Iran can do with the money and what it cannot is being prepared.

The official said the Reserve Bank of India, which had in December, 2010, discontinued a long-standing mechanism of payment through central banks, had previously opposed payments for the Iranian oil in rupee.

India had in February last year started making euro payments through an Iranian bank based in Germany. But under US pressure, Germany soon stopped accepting money from India for onward transfer to Hamburg-based EIH Bank, sending India to the doorstep of Turkey.

Routing payments through Russia was discussed during the visit of Prime Minister Manmohan Singh to Moscow last month. However, Russia is not keen due to the "complexities" involved.

US President Barack Obama signed a Bill into law late last month empowering US authorities to impose penalties on foreign banks dealing with the Central Bank of Iran to settle oil import payments.

National Security Adviser Shivshankar Menon on Thursday chaired a meeting of officials from the ministries of finance, petroleum and external affairs and the Reserve Bank after indications from Turkey's state-run Halkbank that it would have to stop settling payments on behalf of Indian companies.

The official said a preparatory meeting would be held in the Oil Ministry this week.

New Delhi, however, sees no supply disruptions unless the Strait of Hormuz is closed.

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India wants to pay for Iranian crude in rupees - The Economic Times

 

[Yusuf]

Why did china cut oil purchase? China has enough to export to take care of balance of payment.

 

[JAISWAL]

China is insisting on 90 days to pay for imports, while Iran wants payment in 60 days
Plus the US senction pressure might be one of the reason for this.

 

[Yusuf]

Does not sound the right reason. What message is China sending Pak? Sanctions can make china dump friends

 

[johnee]

Does not sound the right reason. What message is China sending Pak? Sanctions can make china dump friends

Someone said that NoKo is China's Pakistan and Pakistan is US' NoKo. The essential message is that Pak has been the moll of US, but if it wants to switch over become the moll of China, then it cannot hope to have the same luxuries and will have to learn to live like NoKo. It also conveys why China can never fulfill the boots of US vis a vis Pak. And the threats of Pak(of switching over to China) are nothing more than bluff.

 

[nrj]

This Iranian payment issue is going to trouble us.

http://defenceforumindia.com/foreign-relations/29737-new-sanctions-iran-pose-problem-indias-oil.html

 

[Iamanidiot]

GCC-Iran war is on the cards NRJ.Invest in the shares of oil companies

 

[Yusuf]

Send hard cash over to Iran in a military flight every 60 days.

 

[Virendra]

Mounting sanctions and reducing global Oil imports. This is modern American artillery softening the target.
US is not interested in looking like a country starting third war in just above 10 yrs.
With this needling they want Iran to make the first move of War, so they could charge in like peace keepers and protectors of the poor victim of Iranian aggression.
Bets on for which face will the west take to breach Iran - GCC ?? or Israel ??

Regards,
Virendra

 

[nrj]

Send hard cash over to Iran in a military flight every 60 days.

I wish it could have been that simple.

GCC-Iran war is on the cards NRJ.Invest in the shares of oil companies

A ploy to decimate capital reserve of developing states imo choreographed by US.

 

[Iamanidiot]

I wish it could have been that simple.



A ploy to decimate capital reserve of developing states imo choreographed by US.

I do not know about US choreography but the GCC monarchies do not want a shite cresecent with theocracy

 

[JAISWAL]

India seeks waivers on Iran sanctions (like US allies Japan, Turkey, SK

NEW DELHI: As new US sanctions on Iran's oil sector take effect, India, which expects to be hit, will ask the US for waivers to minimize the effect of the curbs that may be given to Washington's key allies like Japan, Turkey and South Korea, who, like New Delhi, are all importers of Iranian oil.

National security adviser Shivshankar Menon met US ambassador Peter Burleigh on Friday, and it is expected that senior officials will begin consultations with the US. Foreign secretary Ranjan Mathai will be making his first trip to Washington soon, where this issue is likely to be discussed further. Both Japan and South Korea have said they would start negotiations with the US for similar waivers.

US president Barack Obama signed into effect a new sanctions law - Iran Threat Reduction Act on December 31 - that would bar foreign banks from the US if they conducted transactions with the Central Bank of Iran (CBI), a move intended to choke off Tehran's oil incomes, its main source of revenue. The US legislation calls for American financial sanctions on anyone settling oil trades with the CBI by June 28, 2012, unless the White House issues a waiver or determines the oil market is too tight to implement the legislation. On Thursday, European countries too agreed in principle to put an oil embargo on Iran by end-January.

India has been struggling for the past year to pay Iran for its oil, ever since the Reserve Bank of India dismantled the Asian Clearing Union that was used as a clearing house for trading with Iran. Subsequently, India routed its payments through a German bank and later a Turkish bank, but both routes dried up because of impending sanctions by the US. Since most large Indian banks too will not touch payments to Iran for the same fear, New Delhi has been using a small nationalized bank, Union bank of India, to route its payments to Iran.

India even asked Russia to help route payments to Tehran, but it is believed Moscow was not forthcoming.

India has begun diversifying oil supplies but it has no intention of moving away from Iran because it considers Tehran to be a major player in West Asia. From providing 16% of India's crude supplies, Iran now provides 12%, with Saudi Arabia taking the top spot as the chief source.


India is sourcing crude from countries such as Kazakhstan, Azerbaijan, Mexico, Australia and Venezuela. Between storing oil in large crude carriers and a strategic petroleum reserve, India is unlikely to hurt for oil in the short term. Indian oil companies are likely to fix oil contracts for this year next week, where a further diversification of supplies will be in evidence.

But the trouble is about how India pays for the oil. Paying in dollar and euro is out. India is hamstrung because its export basket to Iran is not particularly big for it to be able to do the kind of barter trade that is now the norm between Iran and China or South Korea.

The RBI has traditionally been wary of paying Iran in Indian rupees, still carrying the scars of the rupee-rouble trade of the 1990s. But South Block plans to put some innovative plans on how Iran can best utilize rupees this will be discussed with both the Indian finance ministry as well as Tehran.

Earlier, Iran has been reluctant on rupee trade, preferring hard currency to Indian currency. But as the sanctions bite, Iran may be persuaded to think out of the box as well.

There is of course the theoretical option of using one of the East Asian currencies like yuan or won. India is unwilling to go down that road because it would be held hostage to the Chinese Central Bank, which New Delhi does not want. China has rejected the US sanctions against Iran and will continue to trade openly with Tehran, but China's economic leverage with both the US and Iran is enormous, which does not hold good for India. Beijing is also demanding and may get discounted crude from Tehran.

The bottom line for India is that it wants to stay engaged with Iran, particularly at a time when Iran feels globally isolated. "China made enormous inroads into Myanmar, when Myanmar was treated like a pariah. We don't want to lose influence in an important country like Iran by backing out at this point," said sources..
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India seeks waivers on Iran sanctions - Times Of India