China to resume imports of oil from Iran soon


China is said to be preparing to resume imports of crude oil from Iran in what analysts say could allay fears that US sanctions on the major producer would constrain global supplies. 

Bloomberg quoted informed people as saying that China would start loading as much as 360,000 barrels per day of Iranian crude oil again before the end of November after a hiatus of a month caused by the newly imposed US sanctions against the Islamic Republic.

Asia’s largest buyer of Iranian oil was one of a handful of countries that was exempted by Washington from Iran sanctions for a period of six months starting this month. Other major buyers that have been given similar exemptions are South Korea and India.

The administration of US President Donald Trump launched the second wave of sanctions against Iran from November 5 in which a universal ban on the country’s oil exports is a primary objective.

US officials have already said the sanctions would be meant to bring down Iran’s oil exports to zero. However, Iranian officials have repeatedly rejected the feasibility of this, stressing that international consumers cannot afford to lose Iranian supplies.

The Chinese government had previously told at least two state-owned companies to avoid buying Iranian oil in the lead-up to Washington’s move to restore sanctions against Iran on November 5..

The nation’s decision to restart purchases precedes an upcoming meeting between Presidents Xi Jinping and US President Donald Trump at the Group of 20 summit next week and coincides with flaring trade tensions between the world’s two largest economies, Bloomberg added.

Although Chinese purchases are set to resume shortly, payments to Iran will only be settled at a later date, the report added, quoting unidentified people familiar with the matter.

India, one of Iran’s top Asian customers, is set to purchase 1.25 million metric tons in November while Korean refiners are likely to be held back by payment and insurance complications until February or later, Bloomberg further added.

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