|Despite sanctions, China seeks full Iran oil volume for third month||
BEIJING (Reuters) - For the third month in a row, China has nominated full contract volumes of Iranian crude for September, trading sources said.
China, Iran's largest oil customer and top trading partner, is expected to load about 15.5 million barrels of Iranian oil this month, the third that it will be using the tankers of National Iranian Tanker Co. (NITC) to carry home oil and get around a European Union insurance ban that began in July.
At 520,000 barrels per day, the Iranian shipper would have to provide eight very large crude carriers (VLCC) each month to meet China's needs alone. A round-trip voyage between Iran and China takes about 48 days.
NITC has a fleet of 39 oil tankers including 25 VLCCs, but the shipper also uses some of its vessels for floating storage. Its plan to expand its fleet, including a $1.2 billion order to have 12 super-tankers to be built in China, has been delayed.
However, Chinese buyers are unlikely to slap punitive measures on from the Iranian side as their contracts do not stipulate such penalties, Chinese sources said.
"We can't do much about that for now. But it's an issue we will discuss internally soon," said a third source.
China and Iran agreed in June to use NITC vessels to supply oil on a delivered ex-ship basis (DES), which sets settlement prices at the point when the oil leaves the tanker in the Chinese port and requests the seller to provide third-party insurance to cover indemnities for oil leaks and personal injuries.
Since July 1, the European marine insurance market that dominates the sector has stopped covering vessels carrying Iranian oil.
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