China renews contracts to buy crude from Iran
Chinese oil firms have renewed contracts to buy crude from Iran for the next year and are seeking to increase their imports from the country, a senior Iranian official said in comments reported on Monday.
Chinese state firms appear to be carrying on business as usual with the world’s fourth-largest oil producer despite US calls for international businesses to cut back on ties with Iran because of a row over Tehran’s nuclear programme.
The United States has been leading efforts to impose more UN sanctions on Iran for failing to halt work the West believes is aimed at building atomic bombs, a charge Tehran denies.
China has said sanctions are not the way to resolve the row.
“China has renewed the contract to buy Iran’s crude oil for the next year and this country is currently negotiating with Iran in order to increase crude oil purchases from Iran,” said Mohammad Ali Khatibi, deputy director of international affairs at state firm National Iranian Oil Company (NIOC).
“China is currently purchasing about 400,000 barrels per day (bpd) and is going to increase this amount, but that [amount] will not be announced until talks are finalised,” he said in comments carried by the state broadcaster’s website.
He said the increase depended on Iran’s ability to boost production. A member of the Organisation of Petroleum Exporting Countries (Opec) Iran now pumps a little more than four million bpd.
Economic considerations
A Western diplomat at the United Nations said this month China did not want punitive steps against Iran that would hurt its economic relations with Iran.
China also wants to invest in Iran energy industry. Sinopec Group, state-owned parent of Sinopec Corp, is involved in protracted talks on developing Iran’s Yadavaran oil field. Chinese officials say the deal is being delayed by Iran’s tough commercial terms, not the threat of more sanctions.
Deals: More supply demanded
Mohammad Ali Khatibi, deputy director of international affairs at state firm National Iranian Oil Company (NIOC), said Chinese state oil traders Zhuhai Zhenrong Corp and Unipec, as well as China’s top refiner Sinopec Corp, were the major importers of Iranian crude and “all of them requested an increase in oil purchases from Iran”.
Traders said earlier that Zhenrong had agreed with NIOC to extend a crude supply deal for 2008, with the volume steady at 240,000 bpd. They also said it was set to renew a one-year deal to buy about one million tonnes of fuel oil for 2008.
Officials from Sinopec visited Tehran earlier this month to seek more crude for next year, to meet steady demand growth in China, the world’s second-largest oil consumer, the traders said.
Tags: oil, Petroleum, Sinopec