News / Asia

Chinese Tanker Loads Iranian Oil

A Chinese national flag flies in front of COSCO's headquarters in Beijing, August 26, 2010.
A Chinese national flag flies in front of COSCO's headquarters in Beijing, August 26, 2010.
Reuters
— A Chinese tanker loaded crude in Iran in March, according to shipping data and an industry official, the first time a China-flagged ship, has transported Iranian crude since EU sanctions imposed last July stopped insurers covering the shipments.

The United States and Europe imposed tough sanctions in 2012 that aim to choke Iran's oil revenue and force the Islamic Republic to halt its disputed nuclear program.

Unable to find insurance for its own vessels because of the sanctions, China has relied mainly on the National Iranian Tanker Company (NITC) to ship Iran's crude to Chinese refineries over the past nine months.

If China has put in place a system of insurance for its own vessels allowing them to participate in the trade again, the country's refineries could boost imports. China is Iran's largest trade partner and biggest oil client, buying around 440,000 barrels per day (bpd) in 2012.

The Chinese-owned supertanker Yuan Yang Hu, with capacity to carry 2 million barrels of crude, called at Iran's Kharg Island on March 20-21 and is en route to China, shipping tracking data showed.

The vessel is owned by Dalian Ocean, a subsidiary of state shipping giant China Ocean Shipping (Group) Company (COSCO).

An official at COSCO's general manager's office said she was unaware of the matter and the company's press official was not available for comment.

The insurance arrangements for the voyage are unclear.  Norwegian marine and energy insurance group Skuld includes the Yuan Yang Hu on the lists of vessels it covers, detailed on its website. Skuld could not be immediately reached for comment.

An industry official with knowledge of the shipment told Reuters that the tanker's insurance and reinsurance had been arranged in China. He was unable to provide more details.

"This is the first Chinese vessel [since the ban]... as one of the lifters got special approval from the authorities to lift Iranian oil on a trial basis,'' said the official, who requested anonymity due to the sensitivity of the matter.  "Insurance is also handled by the Chinese side.''

Iran's fleet has struggled to deliver oil to its biggest buyers China, India and South Korea, all of whom had to switch to Iranian vessels for delivery after the EU sanctions came into place.

China's Iranian imports fell 21 percent in 2012 from 2011 to 440,000 bpd partly due to shipping problems. The fall meant China qualified for an exemption to U.S. sanctions, which require buyers of Iranian crude to continually reduce imports.

Beijing has repeatedly stated its opposition to unilateral sanctions outside of the United Nations, such as those imposed by the United States. But it qualified for an exemption anyway, after the shipping delays and a contract dispute led to the sharp fall in imports.

COSCO's chairman Wei Jiafu told Reuters last July, just weeks after the European insurance ban took effect, that the Chinese government could follow Japan's example and provide insurance for Chinese tankers.

Japan found a way around the EU ban last year when the
government stepped in to provide $7.6 billion in coverage to tankers carrying Iranian crude bound for Japanese ports.
Insurance companies use reinsurers to hedge their risk, and
 the reinsurance market is mostly based in Europe. The EU sanctions prevent those reinsurers from participating in transactions that facilitate Iranian crude exports.

The same problem has also arisen in India for refiners
 seeking insurance for plants that process Iranian crude.

China largest refiner Sinopec processes nearly all the
 Iranian crude imported into the country, which is shipped in by Sinopec's trading arm Unipec and state trader Zhuhai Zhenrong Corp.

Even without any new arrangement on insurance, oil traders
have said deliveries have, since late 2012, "improved significantly'' after NITC deployed old tankers and also took delivery of several new vessels from Chinese shipyards.

In the first two months of 2013, China imported about
 410,000 bpd of Iranian crude, 3 percent more than a year earlier, according to Chinese customs data.

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid