Iran's top four oil clients have cut their imports from the Middle Eastern nation by more than a fifth in the first six months of the year, but are soon to face increased pressure from the United States to reduce shipments still further.
The cuts by China, India, Japan and South Korea point to the United States' and European Union's success in reducing Tehran's vital oil cash flows as they try to force Iran to halt a disputed nuclear programme. Oil shipments from Iran are down about 60 per cent on average compared to pre-sanction levels.
US lawmakers now want to further toughen the measures that have cost Iran billions of dollars a month in lost revenue, with a goal to squeeze exports to a trickle.
"There is continuing pressure from the United States to reduce Iranian crude imports," said Robin Mills, chief analyst at Manaar Energy Consulting. "They are coming up with a fresh bunch of sanctions to reduce Iranian crude exports further."
The US and EU sanctions have made it difficult for Iran's top clients to insure oil shipments and refineries processing Iranian crude, and forced them to find new ways to pay Tehran because it has no access to international banking networks.
The four Asian countries imported 961,127 barrels per day (bpd) of Iranian crude in the January-June period, down from 1.23 million bpd a year ago, according to official government data and tanker arrival schedules given to Reuters, with the largest percentage cuts coming from India and South Korea.
Japan, the last of the four to report its oil imports for June, imported 185,946 bpd of Iranian crude in the first half of the year, data from the country's economy, trade and industry ministry showed on Wednesday, down 22.5 per cent.
That is less than India's cuts in Iranian oil imports of 43 per cent over the first half of the year and South Korea's cuts of 27 per cent, but more than China's reduction of about 2 per cent from the same six months last year.
"China will be key to the success of the sanctions," Mr Mills said. "They have cut the least and their cuts have been more token. They will be key if the United States wants to cut exports further."
Replacement oil for the lost Iranian barrels have come from Iraq, Oman, United Arab Emirates, Latin America and Africa.
China and India, Iran's top two customers increased their imports from Iraq by 38 per cent and 27 per cent, respectively, over the first six months of the year compared with a year ago.
India increased its imports from Latin America over the January to June period by 66 per cent, raising the region's share of overall Indian imports to 19 per cent from 12.6 per cent.
* Reuters