Asian refiners are stepping up their imports of Iranian oil as they face US sanctions waivers expiring in May.
A US State Department official stressed on Monday that Washington continues to pursue a zero-tolerance policy against Tehran and is urging importers to eliminate all oil purchases from Iran.
“The US policy is to drive Iranian exports to zero. That policy has not changed. We are unwavering in our policy,” assistant secretary at the US State Department’s Bureau of Energy Resources Francis Fannon said Monday during a visit to Japan.
Japan is among the eight countries given a 180-day waiver from new US sanctions. Japanese refiners resumed Iran loadings after the Asian country’s banks received regulatory clearance last month to carry out Iranian oil transactions.
On Tuesday, reports said Japanese refiner Cosmo Oil will load around 900,000 barrels of Iranian heavy crude oil in early March.
Cosmo Oil was among the first Japanese refiners along with Showa Shell, Fuji Oil to resume Iranian crude loadings in January, totaling around 4.9 million barrels.
JXTG Nippon Oil & Energy resumed loadings in early February, while Idemitsu Kosan has said it also intends to resume its purchases of Iranian crude oil.
They are rushing to lift as much barrels from Iran as it remains anyone’s guess whether the United States will extend Iran sanctions waivers.
Fannon said on Monday it was premature to say whether the State Department would grant new waivers in May. He was in Japan after visiting South Korea early last week.
Korea National Oil Corporation data released late Monday showed South Korea resumed imports of Iranian crude in January – the first in four months.
The country imported 1.958 million barrels of condensate, an ultra light oil which is mainly used as a raw material to make petrochemicals like plastics.
The US waiver allows the North Asian country to purchase 200,000 barrels a day of condensate for use in several refiners which are designed to process the Iranian grade.
The cargoes were for South Korea’s top refiner SK Innovation which took 3 million barrels of Iran’s South Pars condensate in two separate shipments in January.
A source at Hyundai Oilbank told S&P Global Platts that it plans to receive its first cargo of 1 million barrels of South Pars condensate in mid-February. Hanwha Total is also about to take delivery of around 3-5 million barrels of Iranian condensate, the company said.
New tanker data released last week showed Iran’s exports of crude oil are soaring higher than expected.
According to Refinitiv Eikon data, shipments are averaging 1.25 million barrels per day (bpd) in February after between 1.1 and 1.3 million bpd were exported in January, higher than first thought.
Analysts have said the United States is likely to extend waivers from sanctions in May but will reduce the number of countries receiving them to placate top buyers China and India.
US-based analysts at Eurasia Group said last month that China, India, Japan, South Korea and Turkey were likely to be given waivers, but Italy, Greece and Taiwan would be removed from the current waivers list.
That will effectively mean no change in the status quo. Iran’s Minister of Petroleum Bijan Zangeneh said this month that no European country was buying oil from Iran except Turkey despite having received exemptions from US sanctions.