As reported by Ramsey Al-Rikabi and Yuji Okada of Bloomberg, Refiners in Japan are holding off from signing oil-supply contracts from Iran, four people with knowledge of the talks said, while China International United Petroleum & Chemical Co. agreed to most terms of a 2012 deal with the Islamic republic, according to three other people.
At least three Japanese refiners that buy crude from the Persian Gulf nation haven’t renewed annual contracts with National Iranian Oil Co., pending direction from the government, according to the people, who declined to be identified because the information is confidential. The contracts are for more than 100,000 barrels a day of crude, about a third of Japan’s imports from Iran, according to data supplied by the people.
The talks underline the contrasting way in which Asian countries, among the largest importers of crude, are managing the need to secure supplies against a backdrop of tightened U.S. and European Union sanctions on OPEC’s second-biggest producer. The measures have strengthened the bargaining position of China, which buys about a fifth of Iran’s crude exports, the International Energy Agency said Feb. 10. Refiners in India are studying an Iranian offer to accept extra shipments on revised terms, three people familiar with the matter said today.
“Make no mistake, the party that’s getting hammered left, right and center at the moment is Iran,” said Praveen Kumar, an analyst at Facts Global Energy in Singapore. “They are sitting on about 400,000 barrels a day of excess crude, and it’s fair to say the Asian buyers have the upper hand at the moment.”