Japan’s largest refiner, JXTG Nippon Oil & Energy, resumed loading of Iranian crude oil on Monday, almost three months after the US sanctions waiver was granted.
S&P Global Platts trade flow software cFlow showed that the VLCC Eneos Breeze was set to arrive at Iran’s Kharg Island on Monday.
A JXTG Nippon Oil & Energy spokesman confirmed Monday that the company is resuming its Iranian crude oil loading in February. But the spokesman declined to comment on the specific scheduled loading by the Eneos Breeze.
JXTG Nippon Oil & Energy is the fourth Japanese refiner to recommence Iranian oil loading, after Showa Shell, Fuji Oil and Cosmo Oil resumed crude oil loading from Iran in January – the first in four months – totaling around 4.9 million barrels.
With other refiners planning to resume imports in February, Japan is expected to load about 14 million barrels over January-February, according to Platts calculations based on market information.
That would put Japan’s average Iranian oil imports at 78,000 b/d during the 180-day waiver, down 49 percent from 153,000 b/d imported over May-October 2018, according to Platts calculations.
Japan may have to halt loadings again in March as lifters need to complete voyages before government-backed shipping insurance expires at the end of March for expected renewal on April 1, according to Japanese industry sources.
Japan is among eight countries with the US 180-day waivers allowing them to keep importing Iranian oil through May 4. Confusion surrounding shipping, insurance and banking rules under the US sanctions kept some of the countries from resuming imports for months after the US granted waivers on November 5.
All transactions under the US State Department’s current “significant reduction exemptions” must be completed by May 4.
Fresh waivers would start May 5 for countries that the US determines have met their promises to significantly reduce Iranian imports in the previous six months.
South Korea purchase
Hyundai Oilbank Co., a major South Korean refiner, plans to import two million barrels of Iranian condensate this month, a person familiar with the issue told Yonhap News Agency on Monday.
It would be Hyundai Oilbank's first imports of ultralight crude since September, two months before the United States imposed sanctions on Iran. US President Donald Trump abandoned a landmark 2015 nuclear deal with Iran in May.
South Korea is the third-largest buyer of Iranian oil which received waivers from the US to continue to import crude from the Persian Gulf country.
Hanwha Total Petrochemical Co. – a 50-50 joint-venture between Hanwha General Chemical Co. and French energy giant Total – also plans to import condensate from Iran in February, a company official said.
He declined to elaborate on the amount of shipments, citing policy.
The company last imported Iranian condensate in July last year, when it brought in two million barrels.
The South Korean refiners and chemical firms had relied heavily on Iranian condensate for production of various petrochemical products thanks to a stable supply and price competitiveness.
Iranian condensate accounted for as much as 59 percent of South Korea’s imports of the oil in April last year before dropping to the 30 percent range between May and August.
Naphtha, a key raw material for petrochemicals, is derived from condensate.
SK Trading International Co., a subsidiary of South Korea's biggest oil refiner, SK Innovation Co., also plans to import Iranian condensate in February, though it did not provide details.
In January, SK Trading International bought two million barrels of Iranian condensate.