Page 9 - MEOG Week 46 2021
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MEOG PIPELINES & TRANSPORT MEOG
Cheap oil outweighs sanctions
risk for Chinese buyers
IRAN CHINESE buyers of Iranian crude appear to high in May as buyers ran low on import per-
be working to the premise that obtaining oil at mits, Chinese independent refiners embraced
cheap prices outweighs any risk of getting hit by Iran’s cheaper crude again as the government
US sanctions. released fresh quotas, the traders and ship-track-
China’s imports of oil from Iran have report- ing sources were cited as saying.
edly held above half a million barrels per day “Deep discounts of Iranian oil and the new
(bpd) on average for the past three months. import quotas supported demand from Chinese
Traders and ship-tracking firms suggested independent refiners,” Emma Li, tanker tracker
the figure to Reuters as the news agency looked Vortexa Analytics’ China market analyst, was
at how Chinese purchases of Iranian crude have quoted as saying, adding that strong Chinese
continued apace this year despite the US sanc- refining margins also lent support.
tions threat. Another consideration is that US Officially, according to its customs data,
President – Joe Biden’s administration has so China has not imported any oil from Iran since
far opted not to enforce the sanctions against the start of 2021. But it is widely known that Ira-
Chinese individuals and companies amid the nian crude, thought to account for around 6% of
negotiations with Tehran – due to restart on China’s crude imports, is currently exported to
November 29 – that could revive the 2015 Joint China as oil from countries including Oman, the
Comprehensive Plan of Action (JCPOA). United Arab Emirates and Malaysia.
If the JCPOA is brought back to full effect, Iranian oil was last transacted at a $4-$5 per
the US sanctions threat on Iranian oil would be barrel discount to Brent crude on a delivered
dropped. basis, about $6-$7 below Middle East bench-
After a dip in June and July from a record mark Oman, traders informed Reuters.
Week 46 17•November•2021 www. NEWSBASE .com P9
