BEIJING - With tensions rising between Western countries and Iran and geo-political risks increasing, it's time for China to further diversify its crude oil import sources, industry experts said.
The European Union (EU) reached a preliminary agreement to impose sanctions against Iranian oil exports, Reuters reported, a move that drove Brent crude oil prices higher. A final decision on sanctions is expected by the end of this month.
Sanctions against Iran would inevitably affect China, which would probably reduce its reliance on that nation due to political pressure, said Niu Li, a senior economist with the State Information Center.
Iran, which is China's third-biggest crude source after Saudi Arabia and Angola, exported 420,000 barrels of oil a day to China in 2010, supplying 9 percent of China's total imports, according to the Economics & Technology Research Institute of China National Petroleum Corp (CNPC).
Iran is the second-biggest oil producer in the Organization of Petroleum Exporting Countries. Its estimated oil output is about 3.6 million barrels a day, according to a research note from Standard Bank of South Africa Ltd.
China spent $15.85 billion buying oil from Iran in the first nine months of 2011, up 84.5 percent year-on-year. Oil imports from Saudi Arabia increased just 19.7 percent, while those from Angola rose 0.28 percent, Chinese customs data show.
China's State-owned oil companies, including CNPC, China Petrochemical Corp and China National Offshore Oil Corp, recently slowed the pace of their investment in Iran, reflecting concerns about the uncertain situation, said Song Zhichen, an analyst at China Investment Consulting.
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