China extends Iran oil import cut as sanctions mount
Reuters / Chen Aizhu

BEIJING, Jan 5 (Reuters) - China will reduce crude imports from Iran for a second month, sources said on Thursday, as the two remain divided over payment terms for Iranian crude targeted by ever tougher international sanctions.

The dispute underlines the difficulty Iran will have selling its oil after European Union governments on Wednesday agreed in principle on banning its import and as new U.S. sanctions target payments for the country's crude.

China is the top buyer of Iranian oil and also the fastest growing major oil importer, putting it in a strong position to negotiate for better terms after it more than halved January imports.

It has been scouring the globe for replacements, snapping up February cargoes from Vietnam, Russia, the Middle East and Africa at high premiums.

Refiners in number three buyer Japan on Thursday also expressed concern about being able to secure supplies of the Islamic Republic's crude, with the country's biggest refiner saying it is looking at possible alternatives.

China, which buys around 10 percent of Iran's crude exports, cut its January purchases by about 285,000 barrels per day, just over half of the total average daily amount it imported in 2011.

"February would be the same as January, with the same cut," said a Beijing-based senior crude trader who deals with Iranian oil.

The sticking point in talks is over the credit period. Top Chinese refiner Sinopec Corp, which processes around nin... >>>

recommended by IranFirst