China's Wonfull Petrochemical has bought a cargo of Iranian crude on a spot basis from Trafigura, in a deal that overcomes the hurdle of sanctions preventing banks from opening letters of credit (L/Cs) for deals with Iran.

This is the first significant purchase of Iranian crude oil by an independent refiner according to energy analysts, Platts.

Overcoming barriers

Wonfull received the cargo in April according to Platts, and apart from overcoming the difficulties of obtaining L/Cs for deals with Iran, the company had to face several other hurdles that makes crude harder to obtain from Iran than from anywhere else due to US sanctions.

Companies are also unable to use US dollars to make payments for Iranian oil and face the risk of sanctions when they do business with Iran.

Trafigura credit line

Regular importers of Iranian crude meanwhile are state-owned oil companies with term crude contracts with National Iranian Oil Company and can open yuan- or euro-denominated L/Cs with state-owned China National Petroleum Corporation's Bank of Kunlun.

Wonfull could not obtain an L/C from banks but settled the deal with a credit line offered by Trafigura according to Platts, which says both Trafigura and Wonfull confirmed the deal but declined to give details.

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