Asia cuts Iran crude, awaiting Western deal

TOKYO - Reuters

Top Asian buyers of Iranian oil, including China and Japan, cut imports from the country by 15 percent in 2013, which crept up after its deal with West. AP photo

Asian buyers that are Iran’s biggest oil clients cut their purchases by 15 percent in 2013 and are not expected to ramp up shipments quickly this year, despite the easing of Western sanctions that have curbed Tehran’s exports by more than half. 

China, India, Japan and South Korea together cut imports from Iran to an average of 935,862 barrels per day (bpd) in 2013, government and industry data showed. That would mean an oil revenue loss of $46 billion for Tehran across the year, based on pre-sanction crude exports of about 2.2 million bpd. 

A breakthrough agreement between Tehran and six world powers in November allows the OPEC member to keep exports at the current reduced levels of about 1 million bpd, and opens a door for lifting shipments later. 

Any increase from Iran would weigh on oil prices after other OPEC producers like Saudi Arabia increased exports to fill the gap created by the Western sanctions, as well as by outages in Libya and Iraq, but some doubt how soon the Middle Eastern nation could return its exports to pre-2012 levels. 

Last week the United States and the European Union began following through on promised sanctions relief for Iran covering oil exports, trade in precious metals and automotive services as part of a nuclear agreement signed in November that began taking effect on Jan. 20.

As part of that deal, Iran is due to receive on Feb. 1 its first $550 million installment of a total $4.2 billion in oil funds to be released if its sticks to the agreement to curb its nuclear program.