Yuka Obayashi, Heekyong Yang

TOKYO/SEOUL – Asian oil refiners have been big buyers of Iranian oil for many years and are willing to resume Iranian imports if there is an agreement on a revived 2015 nuclear deal. It could open the door to more global supply, as well softening prices, and allow for greater flexibility.

After Trump’s withdrawal from the Iran nuclear agreement and his reimposition of sanctions against Tehran’s oil exports, most Asian buyers stopped Iranian oil imports to Iran in 2019.

Last week, direct talks between Iran’s government and the United States resumed on the subject of the nuclear agreement. While diplomats from the West have expressed hope for a breakthrough, they are still unable to resolve difficult issues.

As fears about disruptions in Russian energy supply have increased, oil prices are now at an all-time high. Producers have struggled to meet robust demand recovery after the pandemic and record spot premiums are paid by refiners. [O/R] [L4N2US219]

South Korea is now a major oil customer in Asia.

According to a source, the major South Korean refinery, Hyundai, is monitoring developments in the nuclear negotiations. The Iranian crude oil, which is cheaper and easier than other grades like Mexican, is being processed by the company.

According to this source, “We can buy crude oil from Iran as long as both countries agree to resume oil trading.”

He said, “Since crude oil was previously obtained from Iran we do not need to test it at our facilities.”

Japan’s leading refiner Eneos Holdings Inc may consider resumed oil imports to Iran, if a deal can be reached on Thursday.

Tsutomu Suzumori, Eneos chairman, said that although preparations haven’t been made yet to resume crude oil imports from Iran. However, he stated that he would consider this option as an option for procurement if the agreement on nuclear negotiations is achieved.

Sugimori stated that it will take approximately two to three months for Iran to resume its oil imports if there is a nuclear agreement. The refiner will also need to arrange shipping and insurance.

India is Iran’s top refiner. A refiner from India, Iran’s No. 2 customer is currently in negotiations with Iran to source its oil. An Indian refining supply said that the company was still waiting on more information about the nuclear agreement. Due to the sensitive nature of this matter, they declined to identify their sources.

Iran is able to continue exports despite its sanctions. This has happened because intermediaries have managed to conceal the origins. China, Iran’s largest customer has also been a major destination.

China reported last month that it had received its first Iranian crude oil import in over a year.

Russia-Ukraine tensions have heightened volatility in world oil prices. But, positive developments at the U.S.-Iran negotiation have raised hope of Iranian oil returning into markets, helping to calm them, Claudio Galimberti from Rystad Energie, senior vice president said in a research report.

“Though not yet a deal has been reached, oil prices continue to slide on news that there was progress in negotiations and widespread consensus. It could see as much as 900,000.00 barrels per day added to the crude market by December,” he stated.