U.S. Says Singapore, China OK To Buy Iranian Oil

Players in Singapore are free to purchase Iranian fuel oil cargoes.

The U.S. government has today freed Singapore and China from possible economic penalties if they buy Iranian oil or petroleum products, Secretary of State Hillary Rodham Clinton has said in a statement.

The move means players in Singapore's bunker industry, the world's largest bunkering port, are free to purchase Iranian crude and fuel oil cargoes despite a U.S. ban on buying Iranian oil coming into effect today.

Under the ban, financial institutions in a country that has not been granted a waiver will be subject to U.S. sanctions if they knowingly settle trades with the Central Bank of Iran for Iranian oil or petroleum products.

The waivers are valid for 180 days and are renewable providing the nation makes a significant reduction in Iranian oil imports during each 180 day period.

Today's announcement means there are now 20 countries who have secured such waivers.

The Secretary of State said the exceptions had been granted for Singapore and China because they have "significantly reduced their volume of crude oil purchases from Iran."

The statement also said Iran's crude oil exports have dropped to 1.5 million barrels per day, down from approximately 2.5 million barrels per day in 2011.

Despite the countries now being cleared to buy Iranian oil, European sanctions coming into effect on July 1, 2012 mean ship owners found carrying product from the Islamic Republic, either as fuel or cargoes, will lose their P&I Cover.

Ship & Bunker reported last month that identifying fuel oil from Iran in Singapore has become "a major headache" due to the volume of product sold and the practice of combining cargoes from a number of international sources.