Asian importers of Iranian oil put energy and strategic needs first

The US-EU sanctions on Iran's oil industry succeeded in decreasing its oil exports from 1.7million barrels a day in June to about one million barrels a day last month. However, the four major buyers of Iranian oil have decided to increase (India, China and Japan) or resume (South Korea) their imports.

Technical factors have played a part: Iran can now deliver a larger amount of oil on its own tankers, covered by Iranian insurance, and deal with banking transactions through using small non-Iranian banks, for example, and conducting its exports in the importing countries' currency and receiving goods in return for its exported oil.

To a significant extent, these measures have helped Iran offset the sanctions denying it access to international shipping, insurance and banking.

The strategic interests of the four major Asian economies were also a factor. Energy security imperatives require that they continue to work with Iran as their long-term oil and eventually gas supplier.

They are also interested in trade with Iran as a large and growing economy. Besides, Iran is a growing regional power influential in certain energy-rich and strategically important regions (the Persian Gulf/Middle East and Caspian sea) and plays a role in consolidating the multipolar international system, to prevent a unipolar world led by Western interests.

Asian powers also wish to maintain affordable oil prices by keeping Iran as a major supplier. As Iran's exports have fallen, fears of a total halt have seen prices rise to over US$100 per barrel. On top of this, the high-sulphur Iranian oil is suitable for many of their refineries, which otherwise would have to undergo costly modification to accommodate other types of oil.