THE sanctions reducing Iran’s oil exports have played in the favour of major producers such as Saudi Arabia, Russia and Venezuela which now export about 21 per cent more crude to Asia’s biggest buyers compared to a year ago.

Iran’s exports to China, Japan, South Korea and India have fallen by a third in the first six months of the year as EU and US sanctions made it difficult to pay for the crude and find insurance cover for tankers. The US is also finalising even tougher sanctions to restrict Iran’s oil revenues.

As Iran’s oil sales declined, the world’s top oil exporter Saudi Arabia, Russia and other Opec producers Venezuela and Angola ramped up their sales to Asia’s top oil consumers, where refiners can pick and choose from a variety of supplies in a market flush with crude.

Asia is the region where oil demand is growing, as the US economy teeters on recession and Europe tries to stem its financial crisis.

“We have seen that refiners have successfully replaced Iranian crude with other crudes,’’ says Sushant Gupta, an analyst at Wood Mackenzie. “There is no pressure from the supply side.’’

Western powers are trying to force Iran to abandon a nuclear programme they believe is designed for building weapons. Tehran says it needs the technology to generate electricity.

Japan, South Korea and India all cut imports from Iran to gain a waiver from the US sanctions which threaten to cut off institutions dealing with Iran from the US financial system.

China was also awarded a waiver after cutting its imports from Iran due to a dispute over contract terms earlier this year. The EU ban on insuring any Iranian oil shipments also hindered China’s imports from Iran.

In the first half of the year, Saudi Arabia boosted sales to the top four Asian buyers by 15 per cent year-on-year to 3.8 million barrels per day (mbpd).

During the same period, Venezuela’s year-on-year exports also jumped 42 per cent to 596,000 bpd, followed by a 36 per cent year-on-year increase in shipments from Russia to 682,000 bpd. Volumes from Angola have risen 24 per cent year-on-year in the first six months to 994,000 bpd and 26 per cent from Kuwait to 938,000 bpd.

China, Asia’s top oil consumer and the world’s second largest, appeared to favour Russian crude in its purchases during the first six months of the year.

China cut Iranian imports by 20.5 per cent during that period to 429,873 bpd, and Chinese data showed it replaced that amount, as well as an additional 11 per cent, by imports from Saudi Arabia, Angola and Russia.

Russian imports recorded the biggest increase of 44 per cent over the same period a year earlier, followed by Angola’s 35 per cent and Saudi Arabia’s 16 per cent.

Japan’s purchases from Iran for the first six months fell 33.4 per cent from a year earlier to 227,573 bpd, with Saudi Arabia, Russia, Oman and Kuwait filling in the gap. The 17 per cent fall in purchases by South Korea from Iran was filled up by Saudi Arabia, Kuwait and Qatar.

Only India, Asia’s third-largest oil consumer, has posted an increase in Iranian imports. Shipments in the first six months have risen 3.9 per cent as India stepped up purchases ahead of the EU sanctions, which took effect on July 1. Some industry analysts believe Iran’s exports to Asia may not fall further as all four buyers find ways around the sanctions while keeping import volumes low to keep on qualifying for the US waiver.