Flow of Iranian oil to Asia slows as sanctions bite

Tue Apr 10, 2012 7:23am EDT
 
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By Osamu Tsukimori and Charlie Zhu

TOKYO/HONG KONG (Reuters) - Japanese trading houses will cut Iranian crude imports from April, industry sources said on Tuesday, in the latest sign that Western sanctions are curbing the flow of Tehran's oil to its biggest customers in Asia.

Insurers are showing growing reluctance to cover tankers carrying Iranian oil and a senior official at a unit of Chinese refiner Sinopec Corp (0386.HK: Quote) said it was increasingly wary of crude from Iran due to the supply threat posed by sanctions.

The United States and European Union have tightened sanctions on Iran's oil trade as they seek to reduce the flow of petrodollars and force Tehran to halt a nuclear program the West suspects is intended to produce weapons.

"Iranian crude currently is a rather sensitive subject," Sinopec Shanghai Petrochemicals (0338.HK: Quote) Chief Financial Officer Ye Guohua told reporters at an earnings briefing. "This year we will continue to be cautious about Iranian crude imports."

China, India, Japan and South Korea are the four biggest buyers of Iranian crude in Asia, and all of them have cut imports. The sanctions are making it hard for refiners who want to continue importing to find shippers, insurers to underwrite trade and banks to clear payments.

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Iran sanctions graphic link.reuters.com/qeh85s

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Vessels sail past Malta-flagged Iranian crude oil supertanker "Delvar" (L) anchoring off Singapore March 1, 2012. REUTERS/Tim Chong