SINGAPORE: China Petrochemical Corp. (Sinopec Group) and China National Petroleum Corp. (CNPC), the country’s top state-owned refiners, are skipping Iranian oil purchases for loading in May after Washington ended sanction waivers to turn up pressure on Tehran, three people with knowledge of the matter said.
The US has not renewed any exemptions from sanctions on Iran, taking a tougher line than expected on the expiry of the waivers. The waivers were granted last November to buyers of Iranian oil.
China is Iran’s largest oil customer with imports of 475,000 barrels per day (bpd) in the first quarter of this year, according to Chinese customs data.
Two of the sources said Sinopec and CNPC have skipped bookings for cargoes loading in May as the companies were worried that taking oil from Iran could invoke US sanctions and cut them out of the global financial system.
A third source said Sinopec, which buys the majority of China’s Iranian oil imports, does not wish to breach a long-term supply contract, but has opted to suspend booking new cargoes for now due to the sanction worries.
All those with knowledge of the matter requested anonymity due to the sensitive nature of the topic.
Of the five supertankers that loaded Iranian crude in April for China, two have discharged, while another two are waiting off Ningbo and Zhoushan in eastern China to discharge, according to Refinitiv data and Refinitiv analyst Emma Li. A fifth tanker is heading to Shuidong in southern Guangdong province.
The sources said they did not know how long the suspensions will last.
Both Sinopec and CNPC declined to comment. The National Iranian Oil Company (NIOC) did not immediately respond to an email from Reuters seeking comment.
The two firms took a similar move last October by skipping shipments for November, before Washington reimposed sanctions on Iran’s oil exports to push the Islamic Republic to renegotiate a deal to stop its nuclear and ballistic missile programs and curb its regional influence.
They later resumed bookings after the US granted waivers to China and other seven global clients of Iranian oil, and purchased additional cargoes to make up the delayed shipments, according to the third source and trade flow data.
“There are no nominations so far, but companies are trying to find some solution, such as offering to top up volumes in later months,” said the source.
Sinopec agreed in 2012 to lift an average of about 265,000 bpd oil from Iran in a long-term deal that expires end of 2019.
While Beijing has criticized the unilateral US sanctions on Iran and the end to the exemptions, companies are erring on the side of caution unless they receive a specific government mandate to keep ordering oil from Tehran, the first two sources said.
CNPC, whose Iranian oil comes mostly from its investments at two Iranian oil fields, is also skipping imports for this month, said one of those sources.
“For now it’s just not worth the risks as the volume is very small in (the company’s) overall purchases,” said the source.
China calls halt to Iran oil orders
China calls halt to Iran oil orders
- The US has not renewed any exemptions from sanctions on Iran, taking a tougher line than expected on the expiry of the waivers
- Sinopec and CNPC have skipped bookings for cargoes loading in May as the companies were worried that taking oil from Iran could invoke US sanctions
India and US release a framework for an interim trade agreement to reduce Trump tariffs
- Under the deal, tariffs on goods from India would be lowered to 18 percent, from 25 percent, after Indian Prime Minister Narendra Modi agreed to stop buying Russian oil, Trump had said.
NEW DELHI: India and the United States released a framework for an interim trade agreement to lower tariffs on Indian goods, which Indian opposition accused of favoring Washington.
The joint statement, released Friday, came after US President Donald Trump announced his plan last week to reduce import tariffs on the South Asian country, six months after imposing steep taxes to press New Delhi to cut its reliance on cheap Russian crude.
Under the deal, tariffs on goods from India would be lowered to 18 percent, from 25 percent, after Indian Prime Minister Narendra Modi agreed to stop buying Russian oil, Trump had said.
The two countries called the agreement “reciprocal and mutually beneficial” and expressed commitment to work toward a broader trade deal that “will include additional market access commitments and support more resilient supply chains.” The framework said that more negotiations will be needed to formalize the agreement.
India would also “eliminate or reduce tariffs” on all US industrial goods and a wide range of food and agricultural products, Friday’s statement said.
The US president had said that India would start to reduce its import taxes on US goods to zero and buy $500 billion worth of American products over five years, part of the Trump administration’s bid to seek greater market access and zero tariffs on almost all American exports.
Trump also signed an executive order on Friday to revoke a separate 25 percent tariff on Indian goods he imposed last year.
Indian Prime Minister Narendra Modi thanked Trump “for his personal commitment to robust ties.”
“This framework reflects the growing depth, trust and dynamism of our partnership,” Modi said on social media, adding it will “further deepen investment and technology partnerships between us.”
India’s opposition political parties have largely criticized the deal, saying it heavily favors the US and negatively impacts sensitive sectors such as agriculture. In the past, New Delhi had opposed tariffs on sectors such as agriculture and dairy, which employ the bulk of the country’s population.
Meanwhile, Piyush Goyal, Indian Trade Minister, said the deal protects “sensitive agricultural and dairy products” including maize, wheat, rice, ethanol, tobacco, and some vegetables.
“This (agreement) will open a $30 trillion market for Indian exporters,” Goyal said in a social media post, referring to the US annual GDP. He said the increase in exports was likely to create hundreds of thousands of new job opportunities.
Goyal also said tariffs will go down to zero on a wide range of Indian goods exported to the US, including generic pharmaceuticals, gems and diamonds, and aircraft parts, further enhancing the country’s export competitiveness.
India and the European Union recently reached a free trade agreement that could affect as many as 2 billion people after nearly two decades of negotiations. That deal would enable free trade on almost all goods between the EU’s 27 members and India, covering everything from textiles to medicines, and bringing down high import taxes for European wine and cars.
India also signed a comprehensive economic partnership agreement with Oman in December and concluded talks for a free trade deal with New Zealand.
