China Stacks Iranian Oil Before U.S. Waiver Ended

Iran Oil Sanctions
FILE PHOTO: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. (Photo: ReutersREUTERS/Raheb Homavandi/File Photo/File Photo)

China's import reached 800,000 barrels per day of crude from Iran in April as refiners rushed to purchase oil from Iran before the sanction waiver from China expires. It is the highest amount of purchase of Iran's top oil customer since August 2018.

The United States ended the sanction waivers that allow Iranian customers to purchase oil from the country. The waivers were lifted on May 2 which caught the oil market off guard. Many believe that the Trump Administration would extend the effect for some nations in order to retain oil and gasoline prices.

Customers of Iranian oil including China, its biggest importer, rushed to purchase while the prices are down in March and April in preparation for the end of the waiver. The biggest purchasers of oil in Asia, including China, India, Japan, and South Korea, bought 1.57 million barrels per day from Iran. It increased by 36 percent from February. Government data and trades sources said that China's import reached 541, 134 barrels per day.

China increased its purchase of Iranian oil from March to April. Data also showed high imports for eight consecutive months ending in April. Analysts said that the surge in Iranian imports resulted in China setting a new monthly oil import record, despite the fact that there was refinery maintenance and fuel demand was lukewarm.

Reuters calculation of the data from the Chinese General Administration of Customs showed that the total Chinese crude oil imports rose by 11 percent year on year in April 2019, to reach 10.64 million barrels per day.

Wang Zhao, head of crude oil research at Sublime China Information said during an interview with Reuters that the state-run refineries bought a lot of Iranian crude oil to stockpile ahead of the sanction waivers expiry, and this was the key reason for the record Chinese imports last month.

There was no news whether the biggest purchasers of Iranian oil continues their import despite the lifting of the waivers. China, turkey, and India remained silent on the situation keeping their next move a mystery. The United States failed to announce its punishment for those who will continue to purchase Iranian oil.

According to Turkish Foreign Minister Mevlut Cavusoglu, however you look at it, the unilateral decision made by the U.S. is adversely affecting everyone. He added that the United States should review its decisions.

Indian Oil Minister Dharmendra Pradhan said that they have a plan to maintain the supply of crude to Indian refineries. He also said that there will be additional supplies from other major oil-producing countries.

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