Is Asia doing enough to curb Iranian oil purchases?

Iranian oil

However, how much of this was due to a genuine willingness of the Chinese to at least cooperate with the United States is open to debate.

It's quite possible that China's drop in purchases is more down to the dispute over contract terms at the start of the year and the later insistence that Tehran uses its own tankers to deliver cargoes after European insurers withdrew coverage for vessels carrying Iranian crude.

South Korea has the strongest case for the renewal of its waiver for Iranian crude, having cut purchases by 40 percent in the first 10 months of the year over the same period in 2011. South Korea imported an average 145,546 bpd from Iran in the year to end October, but after stopping purchases altogether in the middle of the year, refiners in the North Asian nation have once again stepped up buying.

In October, South Korea bought 186,451 bpd of Iranian oil, and the recent increase in purchases may slightly undermine Seoul's case among Washington lawmakers.

Japan, the other significant buyer of Iranian crude, had its waiver renewed in September and its purchases of Iranian crude were 38.4 percent lower in the first nine months of 2012 over the same period last year.

Although Japan's imports from Iran fell in October from September, they have risen since the middle of the year when purchases stopped amid concern over the measures to prevent European re-insurers, who dominate the global shipping industry, from offering coverage.

What is clear from looking at the big four Asian buyers of Iranian crude is that they made some effort to cut purchases, but seem in recent months to be happy to resume taking cargoes, albeit at lower volumes than in past years.

This tallies with the International Energy Agency's Nov. 13 report, which said Iranian exports rose to 1.3 million bpd in October from 1 million bpd the prior two months.

... contd.

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