Iranian oil exports to China expected to hit 856,000 barrels per day in March 2021

Iranian crude oil exports to China are surging and expected to hit record highs in March despite the US sanctions on the country’s oil industry. Chinese imports of Iranian crude oil are expected to hit 856,000 barrels per day in March, the most in almost two years and up 129% from last month, Bloomberg reports.

Iranian shipments to the province of Shandong, which accounts for a quarter of China’s refining capacity, have surged so much this month they’re causing congestion at ports and filling up storage tanks.

The surge in China’s crude imports from Iran comes as many of other Iranian oil buyers are still waiting for the US President Joe Biden to remove sanctions on the Islamic Republic.

“The surge is related to lower costs but also, politically, to a sense that this might be an interim period between the outgoing administration and the Biden administration figuring out its position on Iran,” said Michal Meidan, Director of the China Energy Program at the Oxford Institute for Energy Studies.

Iranian oil production and exports have been both increasing over the past few months despite the US sanctions and the Iranian Oil Ministry has announced its readiness for boosting the country’s crude oil output to the pre-sanction levels in case of the US rejoining the Joint Comprehensive Plan of Action (JCPOA).

Back in January, the data from SVB International and two other firms indicated that Iranian oil exports were climbing in January after a boost in the fourth quarter despite US sanctions.

Iran’s Deputy Oil Minister Amir Hossein Zamaninia had said earlier that the country started boosting its oil production and would be able to reach pre-sanction levels within two months.

Iranian oil won’t create any surplus in the oil market and the market will be able to accommodate the country’s maximum oil output of up to four million barrels a day, Bloomberg quoted Zamaninia as saying on the sidelines of the Iran Oil Show in Tehran in late January. 

China expels US Navy destroyer from South China Sea

Beijing on Tuesday announced its military has “expelled” a US Navy destroyer sailing near Nansha Islands – also known as Spratly Islands – in the South China Sea in a fresh escalation of tensions between Beijing and Washington.

China said the southern command of the People’s Liberation Army’s (PLA) deployed ships and aircraft to warn US destroyer USS John S. McCain as it sailed through the disputed waters of the South China Sea (SCS).

The incident took place as Shandong, China’s second aircraft carrier, was said to be conducting drills in the SCS region after sailing through the Taiwan Strait on Sunday.

China claims nearly the entire SCS but that claim is disputed by several maritime neighbors including the Philippines, Brunei, Malaysia and Indonesia, besides Vietnam and Taiwan, which China says is a breakaway region.

“The Chinese PLA on Tuesday expelled US destroyer USS John S. McCain after it trespassed into China’s territorial waters off Nansha Islands in the South China Sea,” said Senior Colonel Tian Junli, a spokesperson for the PLA southern theatre command.

China firmly opposes the US warship’s trespassing, said Tian, warning that the US moves undermine the peace and stability of the region.

“Such actions by the US have seriously violated China’s sovereignty and security and severely undermined peace and stability in the SCS,” Tian added.

The US guided-missile destroyer had last week practised anti-submarine warfare with a French submarine and Japanese carrier in the Philippine Sea.

A statement from the US 7th Fleet Public Affairs said the warship was conducting freedom of navigation operations in the SCS.

“On December 22, USS John S. McCain (DDG 56) asserted navigational rights and freedoms in the Spratly Islands, consistent with international law. This freedom of navigation operation (“FONOP”) upheld the rights, freedoms, and lawful uses of the sea recognised in international law by challenging restrictions on innocent passage imposed by China, Vietnam, and Taiwan,” the statement said.

“All interactions with foreign military forces were consistent with international norms and did not impact the operation,” it added.

The US statement added that unlawful and sweeping maritime claims in the SCS pose a serious threat to the “…freedom of the seas, including the freedoms of navigation and overflight, free trade and unimpeded commerce, and freedom of economic opportunity for SCS littoral nations”.

In April, China had scrambled aircraft and deployed ships to track and expel a frontline US warship from near another Beijing-controlled region called Paracel Islands - also known as Xisha Islands in China and Hoang Sa Archipelago in Vietnam - in the SCS.

Accusing the guided-missile destroyer USS Barry of carrying out a “provocative act” and violating Chinese sovereignty, the PLA’s southern command had then said the intrusion of the American warship prompted it to “track, monitor, verify, identify and expel” it.