Iran's top oil buyer, China, will load full contracted volumes of Iranian oil in July after refiner Sinopec and the National Iranian Tanker Co resolved a freight dispute, China-based oil officials said. The dispute had threatened to delay vessels loading crude destined for China, which would have been a further blow to Iran's efforts to keep oil exports flowing despite tough US and European sanctions.

Iran's oil exports halved in the four months from February to June because of sanctions aimed at choking off oil revenues and forcing Tehran to curb its nuclear programme. The West suspects Iran's programme aims to develop weapons, which Tehran denies. "July loadings are solved. There will be eight super-tankers, four each for Unipec and (Zhuhai) Zhenrong," said one official with direct knowledge of the loadings, who declined to be identified due to the sensitivity of the topic. Each supertanker carries around 2 million barrels.

At 16 million barrels, equivalent to about 520,000 barrels per day (bpd), China would account for around half of Iran's total July exports of around 1.1 million bpd. On Tuesday, Geneva-based consultancy Petrologistics said China's July imports from Iran would reach a record of 590,000 bpd. Those figures would reflect crude loaded mostly in June in Iran, due to the voyage time.

EU sanctions have forced China to ask NITC to deliver crude. Chinese vessels can no longer buy cover for the cargoes in European maritime insurance markets due to the sanctions. China has occasionally used NITC vessels in the past but this is the first time top refiner Sinopec has requested Iran to deliver a full month's supplies.

"It's the first time for Iran to sell on delivered basis so there were a few terms here and there that needed to be sorted out. Neither side was super-efficient," said a second official. NITC and Sinopec had disagreed on freight rates, as the Iranians wanted a premium over benchmark shipping rates to compensate for providing insurance, while the Chinese refiner wanted market rates, if not a discount. In a previous dispute between Sinopec and the National Iranian Oil Company (NIOC) over annual contract terms, Sinopec cut oil imports by more than half for the first three months of this year.