Iran Likely to Face Hurdles Selling Condensate to China

by Ship & Bunker News Team
Thursday July 30, 2015

Potential attempts to sell millions of barrels of stored Iranian condensate following the lifting of sanctions is likely to be hampered by low refining margins and a fire which has shut down a major Chinese importer, Reuters reports. 

Margins for naphtha NAF-SIN-CRK and gasoil are reportedly lacklustre, while China's Dragon Aromatics is not expected to resume operations until end of September.

The Chinese company had reportedly been buying around 66,000 barrels per day on a delivered basis prior to its closure.

"Looking at current margins, the chances that we will cut (refinery) runs are higher than those of increasing runs," said an unnamed Chinese trader. 

Reports also say that another major player, Sinopec, is also unlikely to ramp up condensate imports, having already decreased imports this summer following complaints about the strong sulfur smell of condensate. 

However, experts say that China still remains Iran's largest target for its stored condensate, largely because China has proven in the past to be the quickest in raising imports during good economic times. 

Iranian officials have also previously confirmed in reports that an estimated 50 million barrels currently being stored at sea are either condensate or fuel oil.

It was speculated that the statement could have been an attempt to prevent setting off another slide in crude oil prices. 

Earlier this month, it was reported that some analysts were expecting crude to slip to $30 per barrel following the lifting of Iranian sanctions. 

Ship & Bunker News Team
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