Reuters reported that China slashed its crude oil imports from Iran by half in February from December levels to pressure Tehran in a contract dispute.
February was the first month to reflect the full scale of the cuts in China's imports of Iranian oil after top refiner Sinopec Corporation decided in December to chop purchases in an attempt to force Iranians to back off from the tougher terms they had proposed for the 2012 contract.
Data from China General Administration of Customs showed that the February imports at about 290,000 barrels per day are about half of December's 572,800 barrels per day 41% less than the January level and down 40% from February 2011.
The sharp drop in Chinese imports adds to trade pressures on Iran stemming from US and European Union sanctions over its nuclear enrichment program.
The United States exempted Japan and 10 EU nations from financial sanctions because they have significantly cut purchases of Iranian crude. But it left Iran's top customers China and India exposed to the possibility of such steps.
The 491,000 barrels per day level recorded for January factored in a small part of the planned cuts because of the delay due to the roughly three week tanker voyage between Iran and Chinese ports.
Under an annual contract that concluded in late February after nearly three months of talks, China will buy 10% to 15% less crude from Iran this year versus 2011 with the cuts mostly already made in the first three months.
The data showed that China has been scouring the world for crude to make up for the lost Iranian oil. Its extra imports in February from Saudi Arabia other Middle East countries and Russia more than offset the loss of imports from Iran. Imports from Iraq jumped 135 % YoY to 473,634 barrels per day and were up 26% from the level of imports in January.
Crude imports from other Gulf countries also rallied with those from Kuwait up nearly 50 percent on the year to 242,092 barrels per day and from United Arab Emirates up 45% to 195,707 barrels per day. Imports from Russia were 602,714 barrels per day in February, 3.6% higher than in January and 52% higher versus February 2011.
