/LONDON, June 27 (Reuters)–China’s oil imports from Iran surged in June as shipments accelerated before therecent conflictbetween Israel and Iran and demand from independent refineries improved, analysts said.
The world’s top oil importer and biggest buyer of Iranian crude brought in more than 1.8 million barrels per day from June 1-20, according to ship-tracker Vortexa, a record high based on the firm’s data.
Kpler’s data put the month-to-date average of China’s Iranian oil and condensate imports at 1.46 million bpd as of June 27, up from one million bpd in May.
The rising imports were fueled in part by an increase in available supplies from floating storage after exportloadings from Iran reached a multi-year high of 1.83 million bpd in May, Kpler data showed.
It typically takes at least one month for Iranian oil to reach Chineseports.
Robust loadings in May and early June mean China’s imports from Iran are poised to remain elevated, Kpler and Vortexa analysts said.
Independent Chinese “teapot” refineries, the main buyers of Iranian oil, also showed strong demand as their stockpiles depleted, said Xu Muyu, Kpler’s senior analyst.
A possible relaxation of U.S. sanctions on Iranian oil could further bolster Chinese buying, she added.
U.S. President Donald Trumpsaidon Wednesday that Washington had not given up its maximum pressure campaign on Iran – including restrictions on Iranian oil sales – but signaled a potential easing in enforcement to help the country rebuild.
For this week, Iranian Light crude oil was being traded at around $2 a barrel below ICE Brent for end-July to early-August deliveries, two traders familiar with the matter said, compared to discounts of$3.30-$3.50 a barrelpreviously for July deliveries.
Narrower discounts were spurred by worries that oil flows could be disrupted through the Strait of Hormuz, a critical waterway between Iran and Oman, traders said.
Market fears for a closure of the choke-point escalated after last weekend’s U.S. attack on Iranian nuclear sites but eased after Iran and Israel on Tuesday accepted aceasefire.
Tighter discounts for Iranian oil come amid a retreat in futures prices. ICE Brent crude futuresLCOc1hovered at $68 per barrel on Friday, their level before the Israel-Iran conflict began and down 19% from Monday’s five-month /R
EXPORTS SLOW
Iran’s overall crude exports likely slowed in the second half of June amid the Israeli and U.S. airstrikes, Kpler, Vortexa and a third vessel tracking firm told Reuters.
Iran’s total crude shipments have slowed to a monthly average of 1.5 million bpd so far in June, according to Kpler, down from afive-week highof 2.2 million bpd in the week starting June 16.
Vessel tracking firm Petro-Logistics also estimated that shipments dropped in the second half of June after a strong start to the month.
“Crude exports in the first half of the month were at multi-year highs as Iran rushed to exportcargoes following the Israeli attacks of June 13,” Daniel Gerber of Petro-Logistics told Reuters.
“While there appears to have been a slowdown since then, we assess that crude loadings have continued largely uninterrupted.”
A big drop in exports from Iran, OPEC’s third-largest producer, would tighten global supplies and likely supportoil prices.
(Reporting by Siyi Liu, Trixie Yap and Enes Tunagur. Editing by Saad Sayeed, Alex Lawler and Mark Potter)
