REUTERS

TOKYO/BEIJING ASIA’S major crude buyers are finding ways around tough U.S. and EU sanctions to maintain imports from Iran, suggesting that, for now, the worst may be over for the OPEC producer that is losing more than $100 million a day in oil export revenues.

China, India, Japan and South Korea buy most of the one million barrels per day of crude Iran is able to export despite financial, shipping and insurance sanctions aimed at curbing funds for its controversial nuclear programme.

After a lull in imports in the middle of the year caused by Asian refineries reducing purchases as sanctions kicked in, analysts expect shipments to rise in August and September.

But on average, imports are likely to remain steady until the end of the year, unless the United States and the European Union come up with fresh sanctions to curb Iran’s earnings.

“The drop in Iranian oil exports has levelled out over the past couple months at roughly 1 million barrels per day below 2011 levels,” said Trevor Houser, a partner at the New York-based Rhodium Group and a former State Department adviser.

“I don’t expect shipments to Asia to fall much further during the second half of the year, but don’t expect them to increase much either.” At current prices, Iran is losing some $110 million a day in export earnings compared with the start of the year.

Japan more than doubled its August loadings to 7 million barrels compared with July to make up for disruptions through the middle of the year, while India is expected to follow suit and load 2 million barrels at most, industry sources say.

China, Iran’s biggest oil customer and trading partner, kept August loadings unchanged from July at 8 million barrels.

The West suspects Iran is building nuclear weapons, which Tehran denies.

Even though global markets are awash with crude, Iranian oil has retained its appeal with discounted prices, easier trade financing terms and because its grade of highsulphur oil is well suited to many refineries.

Earlier this year, the United States granted allies Japan, South Korea and India a waiver from financial sanctions after they reduced purchases from Iran by around 15 percent in the first half of the year from year earlier levels.

China was given a U.S
waiver after imports fell by more than 20 percent during the same period compared to a y ear earlier due to a dispute over contract terms with Iran.

Imports were hit the most, however, by the EU’s ban on providing insurance for Iranian oil shipments.

EU insurers underwrite most maritime shipping, and insurers elsewhere have been unable to offer cover for the billions of dollars in claims that could stem from a spill.