Reuters reported that Chinese refiner Sinopec has turned down offers of bargain Iranian crude and will cut imports by up to a fifth this year.

A senior Chinese oil executive said that ties with the US are more important than cut price oil as the West squeezes Tehran over its controversial nuclear program. And with just 20 days to go until European Union sanctions against Iran's oil trade effectively cutting off tanker insurance major Asian buyers of Iranian crude were still scrambling on Tuesday for a solution to keep the oil flowing.

EU companies will be banned from insuring tankers carrying Iranian crude from July 1st 2012 and as European insurers cover most of the world's tankers, Asian importers in China, India, Japan and South Korea have struggled to find alternative insurance.

India's state owned refiners will halt planned imports of 173,000 barrels per day from Iran when the EU sanctions take effect unless the government allows them to use insurance and freight arranged by Tehran and Japan's government made the first move towards sovereign insurance, submitting a special bill to parliament to allow it to insure Iranian crude imports.

Government sources in South Korea have said Seoul will simply stop buying Iranian crude from July and a foreign ministry spokesman said that there was no consideration to provide state guarantees on oil imports.

The Chinese official said that the insurance ban would not be a problem for China, which alone buys as much as a fifth of Iran's crude exports. So long as China wants to solve this problem, there must be a way. It won't be a difficult issue. We are fully capable of sorting it out.

Ahead of its own sanctions cutting companies off from the US financial system Washington added India and South Korea but not China, to a list of those exempt, noting their significant cuts in imports from Iran. The West is seeking to choke Tehran's oil revenue and force a halt to a nuclear program it believes is aimed at making weapons. Iran says its nuclear work is for civilian purposes.

The four big Asian buyers have cut Iranian imports by about a fifth from the 1.45 million barrels per day they bought a year ago. The cuts and threat of sanctions have helped drain Iran's oil revenues by an estimated USD 10 billion so far this year.

China opposes any unilateral sanctions on another country and said that it has to buy Iranian crude to meet its energy needs.

Mr Liu Weimin foreign ministry spokesman said that we believe the crude oil trade between Iran and China is completely legal and fair. We have already made clear our position to the US side on this."

The Beijing based official who has knowledge of the refiner's trading operations said that while China made big cuts in Q1 imports from Iran, the United States is wary that Beijing might find it difficult to resist a bargain if Tehran tries to sell crude it can no longer export to other buyers later this year. Sinopec has already resisted such offers.

The official said that the Iranians have made some offers but we have turned them down. The economic benefits of filling some discounted Iranian oil into the national oil reserves would be too small a consideration for the state. The key concern for the Chinese government would be China and US relations.