China Petrochemical Corp (Sinopec Group) and China National Petroleum Corp (CNPC), the country’s top state-owned refiners, are skipping Iranian oil purchases for loading in May after Washington ended sanction waivers to turn up pressure on Tehran, three people with knowledge of the matter said. The United States has not renewed any exemptions from sanctions on Iran, taking a tougher line than expected on the expiry of the waivers. The waivers were granted last November to buyers of Iranian oil.
China is Iran’s largest oil customer with imports of 475,000 barrels per day (bpd) in the first quarter of this year, according to Chinese customs data. Two of the sources said Sinopec and CNPC have skipped bookings for cargoes loading in May as the companies were worried that taking oil from Iran could invoke U.S. sanctions and cut them out of the global financial system.
A third source said Sinopec, who buys the majority of China’s Iranian oil imports, does not wish to breach a long-term supply contract but has opted to suspend booking new cargoes for now due to the sanction worries.