By Micah Halpern
I've Been Thinking:
China has been buying Iranian oil regularly - despite the international sanctions. China needs the oil and Iran needs the market.
Until now, Iran shipped the oil to China using their own Iranian tankers. This was done because since July 1 2012, when European sanctions were added to the US sanctions, insurance companies refused to cover any tanker transporting Iranian oil.
This week China sent its own tankers to Iran to fill up with crude and transport the oil back. Back in China the oil will be delivered to local refineries and flow into local markets throughout the country.
The fact that China is now no longer relying on the National Iranian Tanker Company (NITC) is a monumental shift in policy. It means that China is willing to underwrite the cost of any potential spill, kidnapping of the ship and/or a sinking. It means that the Chinese are thinking seriously about the long term and their oil acquisition from Iran.
China and Iran are linked. They need one another.
Micah@MicahHalpern.com
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