Page 14 - AsianOil Week 13 2021

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Iran signs 25-year

pact with China

POLICY IRAN and China last week signed a 25-year China is believed to be preparing to pump
strategic accord covering bilateral trade, energy, $200-300bn into oil & gas and petrochemicals
infrastructure and military co-operation. Oil development over the next five years, with Chi-
and gas will play a major role in the deal, which nese firms to be given the option to bid on any
has been in the works since 2016. new, stalled or abandoned projects. OilPrice
The agreement was signed in Tehran on quoted Iranian sources as saying that China
March 27 between Iranian Foreign Minister would also be given the option to purchase all
Mohammad Javad Zarif and China’s Foreign oil, gas and petchem products at up to a 32%
Minister Wang Yi, with Iranian President Has- discount to the six-month rolling average when
san Rouhani thanking the Chinese delegation considering risk and choice of currency.
for standing up to “American unilateralism”.
Ali Larijani, former speaker of the Iranian Disguised supply
parliament and potential presidential candidate, China looks set to receive another large influx of
was instrumental to the deal and represented cheap Iranian oil in March passed off as crude
Supreme Leader Ali Hosseini Khamenei in from other origins, curbing the top importer’s
discussions. appetite for crudes from other suppliers, accord-
Ahead of the signing, Larijani said that Iran ing to traders and analysts cited by Reuters on
would not be influenced by temporary external March 30.
factors. “The Islamic Republic of Iran decides Despite US sanctions on Iranian oil exports
independently about its relationship with coun- still being in place, something towards 1mn
tries and it is not like certain countries to change bpd of Iranian crude could reportedly arrive in
its position with a telephone call,” he said. China this month, nearly half the volume that
Meanwhile, Wang noted that “China’s rela- the world’s top exporter Saudi Arabia supplied to
tionship with Iran will not be affected by con- China in the first two months this year.
ditions of the day and it will be permanent and Refinitiv Oil Research was cited as calculat-
strategic.” ing March’s arrivals at 3.75mn tonnes (27mn
With the deal now in place, Tehran and Bei- barrels), topping the previous record in January
jing will work together to increase bilateral trade of 3.37mn tonnes.
by more than 10-fold to $600bn within the next “The trend seems to be continuing, though
decade. buying appetite is waning because of high inven-
Despite years of frustration caused by Chi- tories at ports and abundant supplies,” senior
nese companies dragging their feet on major Refinitiv analyst Emma Li was quoted as saying.
oilfield developments, Iran is likely to welcome Analysts have said China’s quiet and dis-
these firms back to proceedings following the guised buying of Iranian oil, likely with steep
deeper disappointment caused by the failure discounts, has been a key factor behind the slide
of the Joint Comprehensive Plan of Action in global Brent oil prices from $70 per barrel.
(JCPOA) to bring much-needed investment to The situation limits room for OPEC to increase
the sector. production.™

P14 www. NEWSBASE .com Week 13 01•April•2021