China, the biggest buyer of Iranian crude, cut imports by 45 per cent in February from a month earlier as the nations disagreed over payment terms.
Purchases from the Islamic Republic fell to 1.15 million metric tonnes, or about 290,000 barrels a day, according to Bloomberg calculations from data by the Beijing-based General Administration of Customs yesterday. That's the lowest level since May 2010 and compares with an average 557,413 barrels a day last year. China's total net crude imports rose 7 per cent from a month earlier to a record 5.87 million barrels a day.
Purchases from Iran slid as China International United Petroleum & Chemical Co, the nation's biggest oil trader, delayed signing a 2012 term contract with National Iranian Oil Co because of the payment dispute. The issues were largely resolved late last month, according to three people with knowledge of the talks. Iran is seeking alternative buyers as the US and European Union impose sanctions on its oil sales in an attempt to halt its nuclear programme.
China, which typically buys about a fifth of Iran's crude exports, faces US sanctions if it doesn't curtail imports.
President Barack Obama signed a bill on December 31 that denies access to the US financial system to any foreign bank that conducts business with the Central Bank of Iran.
The US won't impose sanctions on Japan and 10 European Union nations that have "significantly" cut back their purchases of Iranian oil this year, Secretary of State Hillary Clinton said on Monday. China, India and South Korea didn't get waivers.