Asian buyers to deepen Iranian crude import cuts in 2013
Asian buyers of Iranian crude will deepen import cuts in 2013 and struggle to send cash to Tehran to pay for oil as tightening Western sanctions choke the flow of hard currency to Iran's coffers.
Tough sanctions from the United States and Europe to force Iran to curb its nuclear programme have already cut Iran's oil exports by more than half this year, costing it more than $5 billion a month.
The reduced cash flow has contributed to a plunge in the value of Iran's currency, the rial. Iran says it is enriching uranium to fuel power plants, not make bombs.
Almost all of Iran's remaining exports flow to China, South Korea, Japan and India. The additional cuts Asian importers will make in 2013 would translate into a fall in sales of about 135,000 barrels per day (bpd), resulting in a loss of about $5 billion next year based on today's oil price, according to Reuters calculations.
The United States requires buyers of Iranian crude to progressively cut imports to ensure they secure exceptions to the sanctions when they come up for review every 180 days.
Making matters worse for Iran is a little-noticed provision in U.S. sanctions, which goes into effect on Feb. 6, that states funds being used to pay for oil must remain in a bank account in the purchasing country and can be used only for non-sanctioned, bilateral trade between that country and Iran.
Any bank that repatriates the money or transfers it to a third
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