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U.S. Sanction Waivers Boost China’s Demand For Iranian Oil

U.S. Sanction Waivers Boost China’s Demand For Iranian Oil

Shanghai : Iran’s largest oil customer China is set to continue importing robust volumes of Iranian crude at least through the end of this year thanks to the U.S. waivers to eight countries that will allow them to keep importing oil from Tehran at reduced volumes until early May next year.

To be sure, even before the U.S. granted the waivers, China was thought to be pretty much the only certain Iranian oil customer to continue importing oil from Iran after the U.S. sanctions returned on November 5.

It looks like Chinese imports of Iranian oil will be kind of ‘business as usual’ in the fourth quarter, with trade flow estimates showing that China’s demand for Iranian oil has not waned. On the contrary, more barrels went into storage in China over the past two months—a sign that the Chinese may have decided to stockpile some Iranian crude before there was any clarity over who’s getting those U.S. waivers.

China’s oil imports from Iran increased by 4.1 percent annually to average 631,556 bpd between January and September, and Tehran was the fifth-largest oil supplier to the world’s top oil importer, official Chinese data shows.

After somewhat reduced import volumes in September, China’s oil intake in October and November is seen rebounding, according to trade flow data from S&P Global Platts.

China’s General Administration of Customs data showed that September oil imports from Iran averaged 520,630 bpd—around 100,000 bpd lower than the average intake for January-September.