Saudi Arabia, Russia and Venezuela now export about 21 percent more crude to Asia's biggest buyers compared to a year ago as the sanctions reducing Iran's oil exports have played in their favor. Iran's exports to China, Japan, South Korea and India have fallen by a third in the first six months of the year as EU and U.S. sanctions made it difficult to pay for the crude and find insurance cover for tankers. The United States is also finalizing even tougher sanctions to restrict Iran's oil revenues
As Iran's oil sales declined, the world's top oil exporter Saudi Arabia, Russia and other OPEC producers Venezuela and Angola ramped up their sales to Asia's top oil consumers, where refiners can pick and choose from a variety of supplies in a market flush with crude. Asia is the region where oil demand is growing, as the U.S. economy teeters on recession and Europe tries to stem its financial crisis.
Japan, South Korea and India all cut imports from Iran to gain a waiver from the U.S. sanctions which threaten to cut off institutions dealing with Iran from the U.S. financial system. China was also awarded a waiver after cutting its imports from Iran due to a dispute over contract terms earlier this year. The EU ban on insuring any Iranian oil shipments also hindered China's imports from Iran.
In the first half of the year, Saudi Arabia boosted sales to the top four Asian buyers by 15 percent year-on-year to 3.8 million barrels per day (bpd). During the same period, Venezuela's year-on-year exports also jumped 42 percent to 596,000 bpd, followed by a 36 percent year-on-year increase in shipments from Russia to 682,000 bpd. Volumes from Angola have risen 24 percent year-on-year in the first six months to 994,000 bpd and 26 percent from Kuwait to 938,000 bpd. China, Asia's top oil consumer and the world's second largest, appeared to favor Russian crude in its purchases during the first six months of the year.
China cut Iranian imports by 20.5 percent during that period to 429,873 bpd, and Chinese data showed it replaced that amount, as well as an additional 11 percent, by imports from Saudi Arabia, Angola and Russia.