Asia's major crude buyers are finding ways around tough U.S. and EU sanctions to maintain imports from Iran, suggesting that, for now, the worst may be over for the OPEC producer that is losing more than $100 million a day in oil export revenues.
China, India, Japan and South Korea buy most of the one million barrels per day of crude Iran is able to export despite financial, shipping and insurance sanctions aimed at curbing funds for its controversial nuclear programme.
After a lull in imports in the middle of the year caused by Asian refineries reducing purchases as sanctions kicked in, analysts expect shipments to rise in August and September.
But on average, imports are likely to remain steady until the end of the year, unless the United States and the European Union come up with fresh sanctions to curb Iran's earnings.
"The drop in Iranian oil exports has leveled out over the past couple months at roughly 1m barrels per day below 2011 levels," said Trevor Houser, a partner at the New York-based Rhodium Group and a former State Department adviser.
"I don't expect shipments to Asia to fall much further during the second half of the year, but don't expect them to increase much either." At current prices, Iran is losing some $110m a day in export earnings compared with the start of the year.
Japan more than doubled its August loadings to 7m barrels compared with July to make up for disruptions through the middle of the year, while India is expected to follow suit and load 2m barrels at most, industry sources say.
China, Iran's biggest oil customer and trading partner, kept August loadings unchanged from July at 8m barrels.
The West suspects Iran is building nuclear weapons, which Tehran denies.