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Sinopec cuts Iranian crude shipments to half

Sinopec
In another blow to Iran's oil sector and economy, China's Sinopec has cut shipments of Iranian crude this month as state oil companies are under intense pressure from Washington to comply with a US ban on Iranian crude set to be introduced in early November, Reuters quoted informed sources as saying.

The sources did not specify the quantities that this company will reduce from Iran, but based on the supply contracts between the largest refinery and the Chinese National Oil Company of Iran, Sinopec's imports will fall to about 130,000 barrels per day.

According to official Iranian statistics, the Chinese company signed a contract to develop the Yadavaran oil field and has a 48.7% stake in field development. The first phase of the project had been producing 85,000 barrels of oil per day since 2014; now in its second phase, the production rate has reached 115,000 barrels per day.

The reduction represents Sinopec's biggest cut in years, as the state-run oil company listed in Hong Kong and New York faces direct pressure from the administration of US President Donald Trump, which is determined to stifle the flow of dollars to Tehran from oil sales.

The move came after senior US officials visited refineries in Beijing last month and asked for significant cuts in Iranian oil purchases, Reuters said, quoting another source.

Other sources in the shipping and insurance sectors said the most complicated issue was Iran's difficulty in securing its oil vessels. Most European and US-based insurance companies are gradually winding down their operations with Iran.

During the last round of UN sanctions on Iran in 2011, officials from Washington asked Chinese companies to cut their investments in Iran's oil and gas fields, but declined to demand a complete halt of oil shipments.

Sinopec buys 260,000 barrels of oil a day from Iran, and 20% of China's total oil purchases from Iran last year were through the company.
Last Modified: Saturday، 29 September 2018 09:01 PM
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