At least two of Asia's four top buyers of Iranian crude will keep imports flowing as they find ways around an EU ban on insuring tankers carrying the Islamic country's oil. Asia needs oil to feed growing demand and top consumers are reluctant to entirely halt imports from Iran and depend entirely on top exporter Saudi Arabia, especially given that output from other alternative suppliers such as Libya and Iraq has not stabilized. Japan has secured a parliament approval that allows the government to provide insurance cover, while China is asking Iran to take on the risk and deliver the crude on their ships. South Korea and India have yet to find a way out. Sources said that together, Japan and China have nominated loadings for as many as 620,000 barrels per day of Iranian oil next month. In less than two weeks, the four Asian buyers who are Iran's biggest customers will lose access to European insurers that cover 95% of the world's tankers for oil spills and collisions. India's government, which has won an exemption to US sanctions has been trying without success to figure out how it will get around the EU sanctions. Seoul, like Tokyo has lobbied the EU to delay or get a waiver on implementing the ban on insurers. It is not considering state guarantees. Mr Guenther Oettinger EU Energy Commissioner said that those lobbying efforts have so far failed. The European Union will not cancel or delay the embargo on Iranian oil tankers. Worries about a supply disruption from Iran had boosted oil prices to a high of over USD 128 per barrel In March. Prices have come off those highs and are nearly down 25% in part due to increased supplies by Saudi Arabia and concerns about a slowdown in the global economy. Sources said that Unipec, the trading arm Sinopec Corporation requested Iran to deliver July loading crude cargoes to Chinese ports. One source estimated Sinopec will lift about 500,000 barrels per day for July, a level similar to the average amount the top Asian refiner bought from Iran last year. The Unipec request suggests that China hasn't worked a permanent way to cover China flagged tankers which have been transporting at least part of the Iranian oil. China is the only major buyer that hasn't got an exemption from US financial restrictions on doing business with Iran. A senior Chinese oil executive said last week that the European insurance ban would not pose a problem and that Iran delivering the crude on its own tankers would be one of the options. Sinopec has since April been lifting a steady amount of Iranian oil versus last year although for the whole of 2012 the refiner would import 16% to 20% less than 2011.

Source