By DEBJIT CHAKRABORTY and YUJI OKADA
Refiners in South Korea, Japan and Taiwan wont
immediately boost Iranian crude imports after the Europe
an Union lifted a ban on
insuring tankers. Indian processors plan to keep within
contracted volumes, while Turkey may buy more.
Its too early to say whether SK Innovation Co., South
Koreas largest refiner, will increase purchases, said
Lee Mi Ji, a spokeswoman in Seoul. Japans Showa Shell
Sekiyu K.K. doesnt plan to change its supply deals
for the time being, according to the company. India
n Oil Corp., Hindustan
Petroleum Corp. and Mangalore Refinery
Ltd. said they
dont intend to buy more than previously planned and
Taiwans Formosa Petrochemical
maintain its current level of imports, said Lin Keh-Yen, a
Insurance was an issue, but the key point is that
there is no lifting of current restrictions on Iranian
crude, they just remain the same, said Neil
Beveridge, a Hong Kong-based analyst at Sanford C.
Bernstein. We dont anticipate any change in
The end of the Europe
an Union ban on insuring
ships carrying Iranian crude is part of a first-step
agreement that will give the country as much as $7 billion
in relief from economic sanctions over six months in
exchange for curbs on its nuclear program.
Oil exports will be held to about 1 million bpd, or 60%
below 2012 levels, under Western sanctions that remain in
force, according to the White House.
Buyers of Iranian crude that have already reduced purchases
wont be required to make further cuts over the next
six months under the new accord. The EU will continue to
prohibit crude imports from the country while banking and
financial measures will remain in place. Sanctions have
deprived the nation of more than $80 billion in revenue, US
President Barack Obamas administration said.
Turkey may increase imports from Iran to as much as 140,000
bpd from about 105,000 bbl now, Energy Minister Taner
Yildiz said today in an interview with CNBC-e television.
Yildiz said last month that the country couldnt trim
crude purchases from Iran further without economic damage.
Iranian crude imports by China, Japan and South Korea
averaged about 783,000 bpd in 2012, down 29% from the
previous year, according to customs data from the three
countries. The three nations imported about 761,000 bpd
during the first nine months of this year, up 1% from the
same period in 2012.
Indias purchases are forecast to total 11 million
metric tons in the 12 months ending March 31, a 15% drop
from the previous year, Petroleum Secretary Vivek Rae said
Nov. 8. Thats the equivalent of about 220,000 bpd.
We can go ahead and import the contracted volume for
this year, said Rajkumar Ghosh, the director of
refineries at Indian Oil, the countrys largest
processor. The company has a deal to buy 1.2 million tons
of Iranian crude in the year ending March 31, of which
500,000 to 600,000 tons have been imported since April, he
said. Middle East suppliers sell the bulk of their crude in
The insurance restrictions affected about 95% of the global
tanker fleet because the ships are covered under rules
governed by Europe
an law. Carrying Iranian
oil would invalidate ships insurance against risks
including spills and collisions, according to the
International Group of P&I Clubs. The Japanese
government started providing sovereign cover for its tanker
operators while India
was due to consider a 20
billion rupee ($320 million) fund to help cover imports.
This is a precursor to overall easing of Iran
sanctions, P.P. Upadhya, the managing director of
, said by phone
yesterday. We are importing about 500,000 tons every
month since August, so we should reach our 4 million-ton
plan by March.
The accord will let Iran raise exports by nearly 300,000
bpd from last months level, said Olivier Jakob,
managing director of consultant Petromatrix GmbH.
Imports fell to 715,000 bpd in October, compared with 1.26
million in the previous month, the International Energy
Agency said in a Nov. 14 market report. Shipments from the
country still averaged 1.1 million bpd in the first nine
months of this year, according to the IEA.
The combined effects of oil, shipping and financial
restrictions caused buyers of Iranian crude to take less
than sanctions allowed, Jakob said by phone from Zug,
Switzerland. By loosening sanctions on insurance, the
agreement will enable importers to buy their full
allotments, he said.
Showa Shell is closely monitoring the situation
around sanctions, Satoshi Yoshida, a Tokyo-based spokesman
for the refiner, said by phone today. The company imports
crude from Iran based on annual term-contracts. An official
for JX Nippon Oil & Energy Co., Japans biggest
refiner, couldnt comment immediately when called
China wants unimpeded progress in energy
cooperation with Iran, Qin Gang, a foreign ministry
spokesman, said in Beijing today. Cooperation between the
two nations in crude and energy had been to some
extent affected by the nuclear dispute, Qin said.
Three calls to the Beijing office of China International
United Petroleum & Chemical Co., known as Unipec,
werent answered. The nuclear deal wont have a
significant impact on CPC Corp.s oil imports, Jessica
Tang, a spokeswoman for the Taiwanese state refiner, said
by phone from Taipei.
We are waiting to see how things will unfold from now
on but its too early to say whether we will expand
our imports, SKs Lee said by phone today.
If things work out well, we are willing to take a
positive perspective on this lifting of the
Hindustan Petroleum plans to import 800,000 tons of Iranian
crude by March if it can begin shipments next month, B.K.
Namdeo, director of refineries at Indias
third-largest state- run refiner, said yesterday. The
countrys processors are unlikely to exceed their
targets in the current financial year, he said.
We will be able to start importing Iran crude even
without the governments insurance pool, Namdeo
In June 2012, there were 23 importers of Iranian crude;
today, only six remain - China, India
, South Korea, Japan,
Turkey and Taiwan, according to US officials.