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Iranian crude exports slide in March

28 Apr 2017 12:09 (+01:00 GMT)
Iranian crude exports slide in March

China leapfrogged India in March to become the largest recipient of Iranian crude that month

London, 28 April (Argus) — The share of Iranian crude heading to Asia-Pacific buyers rose to its highest in five months in March on firm demand from China.

Exports declined to 2.13mn b/d last month, down by 9pc compared with a month earlier, but 45pc higher than in March last year. The share of Iranian shipments destined for Asia-Pacific buyers rose to nearly 70pc last month — or 1.49mn b/d — the highest since the 73pc recorded in October last year, Argus vessel tracking data show (see graph).

China overtook India as the main buyer of Iranian oil, boosting its imports by 17pc to nearly 630,000 b/d in March, tracking data show. China's total crude imports rose to record highs in March. Demand for imports is increasing as spring refinery maintenance draws to a close.

Indian demand for Iranian oil declined to just under 560,000 b/d from more than 640,000 b/d in February, the country's lowest purchases since January. Indian oil demand has been easing, dropping by 0.65pc in March from the previous month — the third monthly decline in a row.

Iranian crude shipments to South Korea eased in March, tracking data show. Just over 180,000 b/d of Iranian crude departed for South Korea last month, down by 34pc against February. But the country's first-quarter crude imports from Iran more than doubled compared with a year earlier, state-owned oil company KNOC says. Imports have risen as Tehran has undercut rival crude producers following the lifting of international nuclear-related sanctions at the start of last year. South Korea had been diversifying its purchases away from the Mideast Gulf prior to Iran's return to international markets.

Japan has been taking less Iranian crude against a backdrop of flagging demand caused in part by refinery capacity closures in the country. Japan bought under 50,000 b/d from Iran last month — in line with February, but well down on the 180,000 b/d that it took in January. A 2mn bl cargo of Iranian crude sailed for Singapore in March, marking the first shipment bound for that particular destination since December.

Some Asian countries have been sating their appetite for sour crude with Russian supply. Over 160,000 b/d of Urals — which competes with Iranian oil — headed to Asia-Pacific in March, bound for China, South Korea, India and Malaysia. A further 135,000 b/d of Urals has been sold to Asia-Pacific for April loading. Low European demand and a narrow Brent-Dubai exchange of futures for swaps — the premium of Ice Brent futures to Dubai swaps, and a measure of the arbitrage to ship Atlantic basin crude east — may have stimulated Asian interest.

Turkish delight

Just a quarter of March's Iranian exports headed to Europe, with regional refineries entering maintenance in early spring. A total of 555,000 b/d of crude sailed for the Mediterranean, down by 14pc against February. Over half of March's Mediterranean-bound supply went to Turkey. Italy retained its position as the second-largest recipient of Iranian supply in the region, although its purchases nearly halved on the month to less than 100,000 b/d. Spain's intake dropped to a third of its February shipments, at just 32,000 b/d. Just one 1.2mn bl cargo of crude departed for France in March.

March also witnessed the delivery of a 600,000 bl cargo of Iranian crude to the Ukrainian port of Odessa, for onward transit to Belarus. The shipment, which was bought by Belarus' state-owned BNK, marks the first instance of Iranian crude sailing for the Black Sea since Russia's Lukoil loaded 650,000 bl of Burgas-bound supply at the end of December last year.

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