China’s crude oil imports from Iran up 36.1%

Imports close to the levels seen before Western sanctions were applied

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China’s March crude oil imports from Iran rose more than a third from a year ago, keeping imports in the first three months of 2014 close to the levels seen before Western sanctions were applied more than two years ago.

China’s intake from Iran in March rose 36.1 percent to 555,182 barrels per day (bpd), customs data showed on Monday, in keeping with the rise in exports from the OPEC member after the November nuclear deal that eased some sanctions on Tehran.

Under the temporary deal, Iran’s exports are supposed to be held at an average 1 million barrels bpd for the six months to July 20, but shipments to Asia have topped that level since November, according to customs and ship tracking data.

China’s imports have been higher this year largely due to new volumes of condensate, a super light crude, and also because top refiner Sinopec Corp may have boosted liftings under a long-term agreement, traders said.

China’s oil arrivals from Iran in the first quarter of this year were at 557,605 bpd, up 36.2 percent from a year ago.

On a daily basis, China’s March imports of Iranian oil climbed 0.5 percent from February's 552,613 bpd.

Ship loading data seen last week by Reuters shows that China’s crude and condensate intake this month - based on March tanker schedules - should be around 562,000 bpd before jumping to more than 600,000 bpd in May.

Iran’s total crude exports fell for the first time in five months in March, and are slated to drop again in April, moving closer to the levels stipulated by the November deal in Geneva.

The drop in Iran’s crude exports - excluding condensate - to just over 1 million bpd in March and to 953,000 bpd for April, according to ship loading data, may reduce some pressure on Tehran ahead of talks next month to finalize an end to its decade-old nuclear dispute with the West.

China may have trouble holding down its own Iranian oil imports in 2014 as state-run trader Zhuhai Zhenrong Corp is negotiating a new condensate contract to supply an independent petrochemical firm Dragon Aromatics, Reuters has reported.

Dragon Aromatics has since the second half of 2013 been buying condensate from Iran as feedstock.

Sinopec, under a new push to cut crude purchase costs, may have stepped up Iranian oil lifting since late 2013 as the supplies are deemed competitive versus similar grades from Saudi Arabia, traders have said.

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