Singapore- The volume of Iranian crude stored at sea has fallen by as much as 4 million barrels because of a spike in Asian demand this month, traders and shipping sources said.
Asian refiners have more than offset waning demand from European buyers who have increasingly shunned Iranian crude because of tough international sanctions, which have made financing oil deals with the OPEC member more difficult. The Eastern buyers have to be taking more of it. You can't flood the European market with it because there are so many people who can't take it,' said a trader with a European oil company.
Only the biggest European oil companies, including Royal Dutch Shell, Total, and Eni, remain major buyers of the Islamic Republic's crude oil, industry experts said.
'Right now, we see about 550,000 barrels per day of Iranian crude coming to Europe,' a second European trader said. 'October is slightly lower than September, which was lower than August.' Iran, OPEC's second-biggest oil producer, exports roughly 2 million barrels of oil a day, mainly to Asia.
Differentials for Middle East grades, including Iranian crude, have risen this month as Asian refiners stock up for winter and middle distillates cracks strengthen. 'I think with December sour crude premiums picking up ... refiners are turning to Iran,' a Singapore-based trader for a Western oil company said, adding that two refineries had recently purchased spot Iranian crude.
The Islamic Republic was storing as much as 16 million barrels of crude oil on tankers offshore, down from 20 million last month, traders and shipping sources said.