Tweet
Turns out that China halving its imports from Iran for the month of January was down to a commercial dispute with Iran rather than for political reasons. China is back up to 500k barrels.
So Much for Sanctions: China, Iran Iron Out Oil Agreement | WSJ Blog | Feb 17 2012
February 17, 2012, 9:06 PM HKT
So Much for Sanctions: China, Iran Iron Out Oil Agreement
China has, at least for now, dashed any hopes that it plans to obey tighter U.S. sanctions against Iran after hammering out an agreement to resume some imports of Iranian crude.
State-owned Unipec, one of China’s top importers, reached an agreement with National Iranian Oil Co. earlier this week to renew an annual supply contract that had lapsed at the end of the year.
During the negotiations, which dragged into February and were only resolved after a visit to Beijing by Iran’s deputy oil minister, imports fell by about 280,000 barrels a day and halved the amount of Iranian crude shipped to China in January and February.
Although the timing of the cuts coincided with a renewed push by the international community to apply pressure to Iran over its nuclear activities, the agreement underscores that China’s dispute with Iran was strictly commercial rather political.
Beijing is typically pragmatic about its relationships with key oil producers such as Iran, which is China’s third-largest supplier of crude after Saudi Arabia and Angola.
Several state-backed oil companies all renewed contracts with NOIC last year, well before U.S. sanctions were tightened, and Unipec was expected to follow suit. But with the U.S. and E.U. moving to target Iran’s financial and oil sectors, Unipec may have found itself in a better bargaining position at a time when it already sought lower prices for crude supply.
China has steadfastly defended its economic ties with Iran, and U.S. officials are typically met with a chilly reception whenever they address China’s crude purchases.
Earlier this year, the U.S. slapped sanctions on Zhuhai Zhenrong, China’s largest buyer of Iranian crude, accusing the company of selling gasoline to Iran. The move was largely symbolic, considering that Zhuhai has no known assets or business ties to the U.S.
Meanwhile, the timing of the agreement also coincides with a visit by Xi Jinping, China’s next leader, to the U.S., where he is hearing concerns over Iran’s nuclear program and is being encouraged to cooperate with international efforts on Iran.
The move by Unipec sends a strong message that while China recognizes the need to resolve Iran’s nuclear issue, it isn’t about to cave to Western pressure.
– Wayne Ma
Iran to increase oil export to China to 500K bpd in 2012 | China Forum | Feb 17 2012
Fri Feb 17, 2012 4:29PM GMT
The National Iranian Oil Company (NIOC) has reached an agreement with the International United Petroleum and Chemical Corporation (UNIPEC) to increase oil exports to China to 500,000 barrels per day (bpd).
The agreement with UNIPEC, indicates that a decline in Iranian crude exports to China earlier this year was due to a commercial dispute rather than political reasons, Dow Jones Newswires reported
According to the report, the deal is another sign that China has no immediate plans to obey US sanctions, which were toughened late last year to increase pressure on Iran over its peaceful nuclear activities.
On the New Year’s Eve, the US President Barack Obama signed into law new sanctions which aim to penalize other countries for dealing with Iran's central bank and importing its crude oil. The European Union also banned Iran oil imports by its members on January 23.
Major Asian oil consumers, China, India, and South Korea, along with Iraq and Turkey have already asked for waivers on US oil sanctions against Iran.
Although the terms of the new contract between NIOC and UNIPEC have not been made public, last year's contract was for 220,000 bpd of crude and 60,000 bpd of condensate from Iran's South Pars gas field.
Iran's deputy oil minister headed a delegation to China this week to negotiate a new crude supply contract and other joint projects in oil, gas and petrochemicals with Beijing.
The new agreement comes following those negotiations and is expected to increase Iran's oil shipments to China to above 500,000 barrels a day in 2012.
During a briefing in Washington on February 14, China’s Deputy Foreign Minister Cui Tiankai dismissed US-led sanctions on Iran to force the Islamic Republic into freezing its peaceful nuclear program, stressing that Beijing intends to pursue its "legitimate economic interests" with Tehran.
The United States, Israel, and their allies accuse Tehran of pursuing military objectives in its nuclear program with Washington and Tel Aviv repeatedly threatening Tehran with the "option" of a military strike against its atomic facilities.
Iran argues that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it has every right to develop and acquire nuclear technology for peaceful purposes.
So Much for Sanctions: China, Iran Iron Out Oil Agreement | WSJ Blog | Feb 17 2012
February 17, 2012, 9:06 PM HKT
So Much for Sanctions: China, Iran Iron Out Oil Agreement
China has, at least for now, dashed any hopes that it plans to obey tighter U.S. sanctions against Iran after hammering out an agreement to resume some imports of Iranian crude.
State-owned Unipec, one of China’s top importers, reached an agreement with National Iranian Oil Co. earlier this week to renew an annual supply contract that had lapsed at the end of the year.
During the negotiations, which dragged into February and were only resolved after a visit to Beijing by Iran’s deputy oil minister, imports fell by about 280,000 barrels a day and halved the amount of Iranian crude shipped to China in January and February.
Although the timing of the cuts coincided with a renewed push by the international community to apply pressure to Iran over its nuclear activities, the agreement underscores that China’s dispute with Iran was strictly commercial rather political.
Beijing is typically pragmatic about its relationships with key oil producers such as Iran, which is China’s third-largest supplier of crude after Saudi Arabia and Angola.
Several state-backed oil companies all renewed contracts with NOIC last year, well before U.S. sanctions were tightened, and Unipec was expected to follow suit. But with the U.S. and E.U. moving to target Iran’s financial and oil sectors, Unipec may have found itself in a better bargaining position at a time when it already sought lower prices for crude supply.
China has steadfastly defended its economic ties with Iran, and U.S. officials are typically met with a chilly reception whenever they address China’s crude purchases.
Earlier this year, the U.S. slapped sanctions on Zhuhai Zhenrong, China’s largest buyer of Iranian crude, accusing the company of selling gasoline to Iran. The move was largely symbolic, considering that Zhuhai has no known assets or business ties to the U.S.
Meanwhile, the timing of the agreement also coincides with a visit by Xi Jinping, China’s next leader, to the U.S., where he is hearing concerns over Iran’s nuclear program and is being encouraged to cooperate with international efforts on Iran.
The move by Unipec sends a strong message that while China recognizes the need to resolve Iran’s nuclear issue, it isn’t about to cave to Western pressure.
– Wayne Ma
Iran to increase oil export to China to 500K bpd in 2012 | China Forum | Feb 17 2012
Fri Feb 17, 2012 4:29PM GMT
The National Iranian Oil Company (NIOC) has reached an agreement with the International United Petroleum and Chemical Corporation (UNIPEC) to increase oil exports to China to 500,000 barrels per day (bpd).
The agreement with UNIPEC, indicates that a decline in Iranian crude exports to China earlier this year was due to a commercial dispute rather than political reasons, Dow Jones Newswires reported
According to the report, the deal is another sign that China has no immediate plans to obey US sanctions, which were toughened late last year to increase pressure on Iran over its peaceful nuclear activities.
On the New Year’s Eve, the US President Barack Obama signed into law new sanctions which aim to penalize other countries for dealing with Iran's central bank and importing its crude oil. The European Union also banned Iran oil imports by its members on January 23.
Major Asian oil consumers, China, India, and South Korea, along with Iraq and Turkey have already asked for waivers on US oil sanctions against Iran.
Although the terms of the new contract between NIOC and UNIPEC have not been made public, last year's contract was for 220,000 bpd of crude and 60,000 bpd of condensate from Iran's South Pars gas field.
Iran's deputy oil minister headed a delegation to China this week to negotiate a new crude supply contract and other joint projects in oil, gas and petrochemicals with Beijing.
The new agreement comes following those negotiations and is expected to increase Iran's oil shipments to China to above 500,000 barrels a day in 2012.
During a briefing in Washington on February 14, China’s Deputy Foreign Minister Cui Tiankai dismissed US-led sanctions on Iran to force the Islamic Republic into freezing its peaceful nuclear program, stressing that Beijing intends to pursue its "legitimate economic interests" with Tehran.
The United States, Israel, and their allies accuse Tehran of pursuing military objectives in its nuclear program with Washington and Tel Aviv repeatedly threatening Tehran with the "option" of a military strike against its atomic facilities.
Iran argues that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it has every right to develop and acquire nuclear technology for peaceful purposes.
Comment