Iranian crude oil imports by Asia's top four buyers dropped to the lowest volume in three years in 2018 amid U.S. sanctions on Tehran, but China and India stepped up imports in December after getting waivers from Washington.
Asia's top four buyers of Iranian crude — China, India, Japan and South Korea — imported a total 1.31 million barrels per day (bpd) in 2018, down 21 percent from the previous year, data from the countries showed.
That was the lowest since about 1 million bpd in 2015, when a previous round of sanctions on Iran led to a sharp drop in Asian imports, Reuters data showed.
The United States reimposed sanctions on Iran's oil exports last November as it wants to negotiate a new nuclear deal with the country. U.S. officials have said they intend to reduce the Islamic Republic's oil exports to zero.
On a monthly basis, Asia's imports from Iran rebounded to a three-month high of 761,593 bpd in December as China and India stepped up purchases after Washington granted eight countries waivers from the Iranian sanctions for 180 days from the start of November.
"We expect Iranian exports to Asia to remain stable at around 800,000 barrels per day until May, when the waivers expire," said Energy Aspects analyst Riccardo Fabiani.
In December, China's imports climbed above 500,000 bpd for the first time in three months, while India's imports rose above 302,000 bpd.
Japan and South Korea did not import any Iranian crude that month because they were still sorting out payment and shipping issues, but the countries have resumed oil lifting from Iran this month.
During the 180-day period, China can import up to 360,000 bpd of Iranian oil, while India's imports are restricted to 300,000 bpd. South Korea can import up to 200,000 bpd of Iranian condensate.
"After May, it will all depend on the U.S. administration's decisions, which at the moment remain completely obscure. On balance, they are likely to extend the current waivers, although rumors are that there could be a significant cut in waivered volumes," Fabiani said.
As a precaution, Indian Oil Corp, the country's top refiner, is looking for an annual deal to buy U.S. crude as it seeks to broaden its oil purchasing options, its chairman said Wednesday.