Beijing, China is reaching a large consignment of crude oil before the new US sanctions against Iran are effective. Refinitiv Eikon data from Reuters revealed that this month, Iranian crude oil is going to reach a large quantity of China’s Northeastern Dalian port. It is worth noting that America’s ban will also be implemented in the first week of November. At a time when the US is trying to ban Iran from buying oil, this move can work as a ‘ghee in fire’ in the trade war between China and the US.
According to the data, a total of 2.2 million barrels of National Iranian Tanker Company (NITC) from supertankers are increasing towards Iranian crude oil dalian. According to the data before January 2015, in Dalian, generally 10 lakh to 3 million barrels of oil are reaching Iranian oil every month. In such a situation, prior to US sanctions, Iran may also have an Iranian plan to collect heavy oil.
This formula was adopted in 2014 too.
Iran is the third largest producer of oil in the Organization of the Petroleum Exporting Countries (OPEC). Significantly, the demand for crude oil is decreasing even before the US sanctions on Iran’s oil exports come into effect on November 4. Iran had earlier stored its oil in Dalian during the sanctions in 2014, which was subsequently sold to its buyers in South Korea and India. Let us know that some big refineries and commercial oil storage facilities are located in China’s Dalian.
Last week, Reuters had reported in its report that one of the 11 Very Large Crude Carriers (VLCCs) had left oil in the storage tank on Shinghang section of Dalian port on October 8. The second VLCC (Dino 1) had delivered oil near the port on October 13. A few days ago, Dino 1 once again appeared near Taiwan and left his cargo. There are several tank farms located in the area of Shinghang, which also have commerce and strategic reserves. Both China National Petroleum Corporation (CNPC) and Dalian Port PDA Company Limited operate their own commercial storage from this area.
What will get options?
One source told that CNPC does not know whether any consignment of Iranian oil is reaching Dalian or not? He also said that due to American sanctions, there is less chance of buying Iranian oil from Dalian tanks by buyers. In this case, keeping oil in bonded storage, the owner of the cargo gets the option to sell the oil in China or to other buyers in the area.
On the other hand, NITC tankers have discontinued their tracking devices to avoid U.S. administration’s restrictions. According to the data, three tankers are to reach Chang’an in China in November. Reuters asked NITC to respond to this but no official was available because the weekend is running in Iran.