The world’s biggest oil importer purchased about 800,000 barrels of Iranian oil per day, the highest since August, customs data cited by Reuters on Wednesday showed.
On May 2nd the United States stopped its waivers which allowed eight countries to buy oil from Iran despite Washington’s unilateral sanctions on the country.
China is Iran’s biggest oil client and the US decision has added another fault line to already strained relations between Washington and Beijing which has formally complained to the United States over the move.
Companies such as Sinopec and China National Petroleum Corp. have invested billions of dollars in Iranian oil fields and they recoup their money by sending oil from the fields to China.
On Tuesday, China’s Foreign Ministry spokesman Geng Shuang dismissed reports of a trade agreement between Beijing and Washington, committing China to reduce its imports of oil from Iran.
“I have no idea what is your source of information. I have not heard of that,” he said during a news conference after being queried by a reporter.
Geng said last month that China is resolutely opposed to the United States enforcing unilateral sanctions or “long-armed jurisdiction.”
The US decision against Iran will contribute to volatility in the Middle East and in the international energy market, he said.
“China urges the US side to earnestly respect China’s interests and concerns and not take any wrong actions that harm China’s interests,” the spokesman said.
According to customs data, China bought 29.27 million tons, or about 585,400 barrels a day of Iranian crude oil, last year.
Analysts say it is not easy – at least in the short term – to source this volume of crude from other countries.
Some Chinese refineries are configured to process Iranian grades which yield better margins than those supplied by other exporters such as Saudi Arabia, according to China’s refinery officials.
India to take new shipments
Indian refineries are also configured to Iranian crude specifications as are those in South Korea.
Tanker arrival data cited by Reuters on Wednesday showed India’s oil imports from Iran were down about 31.5 percent from the previous month, at 277,600 barrels per day (bpd).
According to the news agency, Indian refiners are about to get two very large crude carriers carrying four million barrels of Iranian oil this month – one each at Paradip in the east and Kochi in the west.
Indian companies have increased spot purchases from the US and are reportedly under government pressure to tie up long-term contracts.
However, US Commerce Secretary Wilbur Ross on Monday said the US government will not ensure the sale of its oil to India at cheaper rates.
Indian refiners have said they want to continue buying Iranian oil for which they are accorded free shipping and an extended credit period.
On Tuesday, Ross warned India against any retaliatory tariff in response to the United States’ planned withdrawal of trade privileges.
The US is India’s second-biggest trade partner after China. Indian officials have raised the prospect of higher import duties on more than 20 US goods if President Donald Trump presses ahead with a plan to end preferential duty-free imports from India.
Ross said India’s new e-commerce rules could hurt future investments by the US in the South Asian country, even as he said he was hopeful that US firms would win defense deals from India in the future.