Asia, Iran's Top Oil Buyer
As a top oil and gas producer in the world, Iran has always had a big share in global market. During years of sanctions, Iran's oil sale to European countries dropped sharply. However, Iran has its traditional customers. This time, it was Asian countries that lined up to buy oil from Iran.
Official data about Asian countries' crude oil imports in 2016 bear proof to this fact. Last summer, Asian buyers of Iran's oil raised their purchase by 47% year-on-year, while they bought oil 100% more month-on-month as the year was drawing to a close. These facts indicate that Iran has managed to regain its market share in Asian countries much sooner than expected.
China, India and South Korea Eye Iran Oil
India, China, South Korea and Japan were the main buyers of Iran's crude oil. When the US and the European Union toughened sanctions against Iran's oil sector, these countries were forced to reduce their oil purchase from Iran. Therefore, the removal of sanctions last January gave them a chance to resume their oil imports from Iran.
China, the world's second largest economy and a major buyer of Iran's crude oil, never halted its oil imports from Iran. However, it had to reduce the volume of its oil purchase from Iran.
China's demand for foreign crude could touch new highs as state-run refiners start up new plants and as Beijing allows more independent refiners to import crude, with the country forecast to remain a key driver of 2017 demand growth.
State refiner Sinopec Corp and state-run oil trader Zhuhai Zhenrong Corp, the two biggest Chinese lifters of Iran's oil, are set to roll over annual supply agreements with National Iranian Oil Co (NIOC), with combined volumes of about 505,000 b/d, which equals half of Iran's total current crude oil exports.
Additionally, China National Petroleum Corp (CNPC) and Sinopec expect to lift more oil this year from two oilfields they operate under service contracts.
Sinopec signed a development deal for Yadavaran field in late 2007 with CNPC signing a deal for the North Azadegan field in 2009, after Japanese and European companies pulled out of the projects, both in the southwestern Iranian province of Khuzestan, due to sanctions over Iran's nuclear program.
Meantime, India's annual oil imports from Iran surged to a record high in 2016 as some refiners resumed purchases after the lifting of sanctions against Tehran.
The sharp increase propelled Iran into fourth place among India's suppliers in 2016, up from seventh position in 2015. It used to be India's second-biggest supplier before sanctions.
For the year, the world's third biggest oil consumer bought about 473,000 b/d of oil from Iran to feed expanding refining capacity, up from 208,300 b/d in 2015.
In December, imports from Iran trebled from a year earlier to about 546,600 b/d.
South Korea is also one of Iran's major oil customers. Seoul imported 14 million tons, or 281,187 b/d, of crude from Tehran in 2016, up 145.4 percent from 5.7 million tons, or 114,595 b/d, in 2015.
Figures also show that the world's fifth-largest crude importer bought 1.55 million tons of Iranian crude in December, or 367,317 b/d, compared with 207,629 tons a year ago and 1.73 million tons in the previous month.
India, South Korea Up Imports
Last August, official data showed that Iran's oil sales had doubled owing to the lifting of the sanctions. That meant that Iran had clawed back market share it lost under sanctions. Iran exports 75% of its crude oil to Asian countries. According to Reuters, Iran's oil sales to China, Japan, India and South Korea were up 47.1% in June year-on-year.
Before sanctions were imposed on Iran in 2012, China was the largest buyer of Iran's crude oil. It was followed by India, Japan and South Korea. After the removal of sanctions, China and India remained top buyers, but South Korea overtook Japan.
Although Iran managed to bring its oil production back to the pre-sanctions level quickly, China did not show any inclination for more oil. But India and South Korea kept lifting their oil purchase from Iran. Japan, which ranks fourth among buyers of Iran's oil, has also increased its oil imports.
Asia More Than Double Iran Oil Imports
Imports of crude oil by Iran's four major Asian buyers in November more than doubled for a second straight month from a year ago. Meantime, purchases by India and South Korea more than four times higher.
Iran's top four Asian buyers - China, India, South Korea and Japan - imported 1.94 mb/d in November, up 117% on a year earlier, government and ship-tracking data showed.
That was just short of the 2016 peak of 1.99 mb/d hit in the previous month, which was the highest since at least 2010, according to data by International Energy Agency.
Iran's crude oil imports cost Japan an average $45.46 a barrel for November, which was the third cheapest after Mexico and Oman, customs-cleared trade data by Japan's Ministry of Finance showed.
Japan's trade ministry released official data showing its imports jumped 41.2% from a year earlier to 237,653 b/d last month.
India's imports grew more than four-fold from a year earlier to 620,000 b/d, topping China's imports for a third straight month. South Korean imports were nearly five times higher at 472,067 b/d.