China’s Sinopec, the world’s biggest refiner by capacity and throughput, is reportedly discussing “special arrangements” on the flow of Iranian oil ahead of US sanctions which are to go into effect on November 4.
Sinopec’s Vice President Huang Wensheng was quoted as saying on Wednesday that many of the company’s refineries are configured to process Iranian crude oil, which has a rich aromatics content, and that the company has had term contracts with Iran for over two decades.
The company is in discussions with government authorities and Iranian suppliers, “trying to make special arrangements on the flow in the coming weeks,” financial news provider Platts quoted Huang as saying.
China is Iran’s biggest oil customer, with shipments ranging from 500,000 barrels per day to record 800,000 barrels per day.
China’s imports of Iranian oil spike to record 874,000 barrels per day, ahead of US plans to sanction Iran’s energy sector.
Beijing has pledged to maintain Iran oil imports despite US call on Chinese buyers to cut shipments from Iran to zero from November or face sanctions.
State-run Sinopec takes in two-thirds of China’s crude imports from Iran. According to Platts, the company bought around 149.83 million barrels of Iranian crude oil in 2017, accounting for 8.6% of its total crude throughput.
The news comes despite a Reuters report earlier this month that Sinopec and China’s another top state-owned refiner, CNPC, planned to skip Iran oil bookings for November.
Chinese ports of Dalian and Zhoushan are reportedly receiving stepped-up supplies of Iranian oil.
Tankers operated by National Iranian Tanker Company are shipping oil into storages, giving Iran the options to store the oil or sell to regional customers later.
CNPC and Sinopec have invested billions of dollars in Iran’s giant Yadavaran and North Azadegan oil fields and eye participating in further developments of the deposits.
CNPC is considering taking over Total’s stake in phase 11 of Iran’s South Pars gas field after the French company left the project in August.