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China bought more crude from Iran in June than it did on average last year before sanctions against the Persian Gulf nation imposed by the European Union that went into force July 1.
Bloomberg reported that Iranian oil shipments rose 17 percent from May to 2.6 million metric tons, or about 635,000 barrels a day, according to Bloomberg calculations from data e-mailed by the Beijing- based General Administration of Customs today. China bought 2.3 million tons of crude from Iran on average each month, or about 557,000 barrels each day, last year.
China, the Islamic nation’s biggest crude customer, calls its purchases “completely justified and legitimate.” June’s imports reached the highest in 11 months and was the third-straight month of expansion, after China cut back buying in the first quarter while negotiating a payment dispute with Iran’s national oil company.
“Many Chinese refineries are designed to process only Iranian crudes and not other grades,” Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities, said by e-mail today. “Even if China wants to follow the EU sanctions, it will take at least three to six months or early 2013 before we see any meaningful reductions.”
Iran’s share of China’s overseas purchases rose for a fourth month, according to Bloomberg calculations based on the customs data. Crude from the country accounted for 12 percent of total imports in June, up from 9 percent in May and the highest since October.
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