China has made an audacious move to force Iran to sell it cheaper
crude, disrupting the flow of more than 10 per cent of its exports by
cutting January imports in half.
In contrast to other top Asian
buyers worried about what sanctions mean for crude flows from the
world’s fifth-largest exporter, China has shown no public qualms about
the risk that a disruption will drive up the cost of oil.
world’s second-largest crude importer has chosen its moment for hard
bargaining. Iran is facing the threat of fresh sanctions from the US and
European Union over its nuclear programme that could prevent Asian
refiners from paying for Iran’s oil, and European refiners from buying
With fewer buyers, Iran will face a stark choice: either sell
more to top buyer China or cut the exports that provide Tehran’s
China knows it is Iran’s buyer of last resort.
So when Iranian negotiators refused to budge on their demand for
tougher terms on 2012 oil sales, refiner Sinopec (SEHK: 0386) responded
by cutting its January purchases by about 285,000 barrels a day.
is over half of the near 550,000 bpd that China has been buying this
year and over 10 per cent of Iran’s 2.4 million bpd of exports.
is a good time for the Chinese to bargain,” said Liu Tong Zhang,
Singapore-based analyst at cons… >>>