Too early to tell apparently because Chinese crude imports from Iran appear to have increased massively in the last three months from a low of under 400,000 bpd to over 650,000 bpd at the end of July. However a close analysis of what is going on appears to show a more complicated picture.
June was also the month when the US renewed six month waivers on Iran sanctions for China, India and eight other countries on the grounds that they would reduce their crude imports from the "rogue" state. Data for July shows that India may have ceased to import Iranian crude but China's imports have been rising under a stock building programme to levels equalling January's.
However, with VLCC owners increasingly worried by the repercussions of trading with Iran under sanctions, exports from the region are increasingly carried by the national carrier NITC according to Gibson's analysis. NITC has added 12 VLCCs to its now 37-strong fleet since September.
However, Gibson's reckons 14 VLCCs are involved in storage off the Iranian coast, 11 are heading east mostly to China with three coming back.
Some five VLCCs are anchored off China and four have been there since June/July. Sources from China suggest they may have no need for these cargoes as some programmes are full. So have the Chinese succumbed to pressure to reduce Iranian imports? Time will tell when we see if these cargoes are unloaded.
Meanwhile absence of these ships is welcome though not making a big dent in the overall VLCC supply/demand imbalance.
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