February imports of Iranian crude into Asia are expected to nearly double to 1.38 million bpd, Refinitiv data from Refinitiv, global provider of financial markets data and infrastructure, showed, according to a Reuters report.
In January, Japan lifted its first Iranian oil cargo since the sanctions and the shipment is expected to arrive in February.
South Korea resumed imports of Iranian oil in January after a four-month hiatus, but its shipments were down 75 percent from the same month last year, data from the Korea National Oil Corp showed.
The third-largest buyer of Iranian oil in Asia has restricted its purchases to only condensate, an ultra light oil used in producing naphtha for petrochemical production.
Imports by Japan and South Korea are set to pick up in the months up to May as buyers maximize the volume of oil they can lift during the waiver, trade sources said.
Iran’s biggest customer China imported 377,038 bpd in January, down from more than 500,000 bpd in December. Still China’s January imports remained above the 360,000 bpd that Beijing can import under the waiver.
India also scaled back imports in January to 270,500 bpd, below the 300,000 bpd that Iran’s second largest client is allowed to import.
Asia’s crude oil imports from Iran dipped in January to the lowest in two months after top buyers China and India slowed down purchases and as Japan recorded zero imports for a third month, government and trade data showed.
Asia’s top four buyers of Iranian crude - China, India, Japan and South Korea - imported a total 710,699 barrels per day of crude from Iran in January, 49 percent lower than the same month in 2018, the data collated by Thomson Reuters showed.
U.S. sanctions on Iran that took effect last November have severely reduced its exports to Asia even though Washington gave waivers to eight countries allowing them to import lower volumes of Iranian oil for six months.
Buyers had to overcome shipping and payment issues which delayed the resumption of Iranian oil imports in Japan and South Korea. Iran is the fourth-largest oil producer in the Organization of the Petroleum Exporting Countries.
Another sticking point has been how to repatriate the oil money as the secondary US sanctions have choked financial dealings with Iran. However, the Central Bank of Iran (CBI) has been hard at work to establish non-dollar monetary mechanism with top Asian importers in a bid to facilitate oil purchase and its financial clearance.
Early this year, CBI Governor Abdolnaser Hemmati, said the oil money is coming back from China, India and South Korea. The Indian UCO Bank decided to cut hefty taxes on Iran oil money in rupee deposited in its accounts. Also, Japan is about to resume banking ties with Iran.
Iran has also put in place another channel with Iraq to clear oil, gas and electricity payments from the Arab country.