China renews deal to buy Iran crude

China has renewed its annual contract to purchase and import Iranian crude despite the US-engineered UN sanctions that block transactions with the Iranian banks.

China, the world’s largest buyer of Iranian crude oil, has renewed its annual import pacts for 2011, keeping volumes steady at some 460,000 barrels per day (bpd), Reuters quoted industrial sources as saying.

Neither the US nor the US-engineered UN sanctions forbids dealing in Iranian crude.

However, many companies have sought alternative crudes over the past year to avoid clashing with Washington and because of the added difficulties in organizing bank financing.

Iran is still providing some European companies, such as Italy’s ENI, with crude oil. However, the delivery is made under pre-existing agreements.

Iran is the second biggest oil producer of the Organization of Petroleum Exporting Countries (OPEC). Tehran exports more than half its output or roughly 2 million bpd.