August 21, 2013 / 9:32 AM / 6 years ago

UPDATE 1-China's July Iran crude imports drop, put it closer to 2013 goal

* July crude imports from Iran 397,261 bpd, down 12.6 pct y/y

* Jan-July imports 420,267 bpd oil from Iran, down 3.5 pct

* Crude imports from Iraq more than double in July y/y

By Judy Hua and Chen Aizhu

BEIJING, Aug 21 (Reuters) - China’s average daily crude imports from Iran fell 12.6 percent in July from the same month last year, putting it closer to hitting what officials have said is the likely goal for 2013 imports from the Middle Eastern nation.

Last month’s reductions mean China would have to reduce its year-to-date Iranian oil imports only about another 4,000 bpd to hit that unofficial target for this year.

China and other Asian importers of Iranian crude have to keep reducing the shipments to win waivers to U.S. sanctions aimed at curbing the country’s disputed nuclear programme.

Top refiner Sinopec Corp, the world’s single largest processor of Iranian crude, may make deeper cuts in the remaining months of the year to take its total cut this year to about 5 percent, according to a trading official familiar with the Chinese oil major’s oil procurement strategy.

“A more significant cut would not be beneficial to the individual plants under Sinopec, simply because of the economics of Iranian oil,” said the official.

China’s imports of Iranian oil for the year so far have dropped to 12.205 million tonnes, or 420,267 barrels per day (bpd), down 3.5 percent from the same seven months last year, official customs data showed on Wednesday.

Chinese officials told Reuters late last year that domestic refiners may cut their Iran shipments 5-10 percent this year from the 438,450 bpd average for 2012.

That would mean China’s average daily Iran oil imports for 2013 have to fall into a 394,600-416,400 bpd range.

The U.S. sanctions are aimed at cutting off Iran’s oil revenues and bringing it to the negotiating table over its nuclear power programme, which the United States says is intended to provide material for a bomb. Iran denies this.

The U.S. House of Representatives in July easily passed a bill that is the first to spell out exactly how much Iran’s oil exports should be cut, setting a goal of reducing the shipments by another 1 million bpd to near zero.

The bill would still have to be approved by the U.S. Senate and signed by President Barack Obama before becoming law.

An Iranian oil official, however, said President Hassan Rouhani’s nomination of former oil minister Bijan Zanganeh to return to that post, and management change inside the National Iranian Oil Company could arrest Iran’s declining oil sales.

“My guess is that China may just keep the cuts at the current levels,” said the Iranian oil official.

China brought in 1.687 million tonnes, or 397,261 bpd of Iranian crude in July, up 3.2 percent from June, the data from the General Administration of Customs showed.

The July level fell 12.6 percent from 454,500 bpd a year earlier.

Iraq has been one of the main beneficiaries of the cuts in China’s Iranian volumes. China’s oil imports from Iraq more than doubled in July from a year ago and are up nearly 50 percent for the January-July period.

In early August, a majority of U.S. senators urged President Obama to raise pressure on Iran over its nuclear programme by toughening sanctions and renewing the option to use military force while also exploring diplomatic solutions.

China is Iran’s top trading partner and has repeatedly voiced its opposition to unilateral sanctions outside those by the United Nations, such as those imposed by the United States.

China’s total crude imports in July soared to a record high of 6.15 million bpd, up 14 percent from a month ago, as refiners replenished inventories to meet higher runs and a new condensate splitter started test operations.

Editing by Tom Hogue

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