Iran is set to increase oil shipments in July as China increases imports to a record high to amount to more than half Iran's crude exports, an industry report said.
 
Four big countries are expected to import Iranian oil in July -- China, India, Japan and Taiwan, Geneva-based consultancy Petrologistics said, although it is possible a cargo could be diverted to Turkey.
 
China is now easily Iran's biggest customer. It is expected to increase imports to 587,000 bpd in July, or 54 pct of Iran's total exports, from 428,000 bpd in June and 478,000 bpd on average on 2011, the Petrologistics report said.
 
India's Iran oil purchases in July are also expected to rebound to 335,000 bpd from 264,000 bpd in June, a little above its average imports last year of 326,000 bpd.
 
Petrologistics said privately held Essar Oil was responsible for the bulk of the import increase. Essar is not restricted by the Indian government's shipping and insurance regulations on Iran.
 
Taiwan will take one cargo, equivalent to 65,000 bpd, having imported nothing since March. It averaged only 28,000 bpd on average in 2011.
 
The increase by China and India contrast with Iran's two other big Asian importers in previous years, Japan and South Korea. Japan is expected to import 98,000 bpd this month or little more than a third of last year's purchases. South Korea cut imports from Iran to zero in July after failing to secure shipping insurance.
 
China to give insurance to tankers carrying Iran oil
 
China's government can follow Japan's lead and provide insurance guarantees for Chinese tankers carrying Iranian oil amid Western sanctions on Iran, top shipping conglomerate COSCO Group said on Tuesday.
 
"We need to wait until the insurance issue is solved. We are pushing for a solution right now. Without insurance cover, we wouldn't dare to ship oil from Iran," Wei Jiafu, COSCO Group's chairman, told Reuters on the sidelines of a conference.
 
"Japan has set a precedent, we can just follow their lead." Japan's parliament approved government guarantees on insurance for crude oil cargoes from Iran on June 20, becoming the first of Iran's big Asian oil buyers to get round European Union (EU) sanctions which ban European firms from insuring tankers carrying Iranian oil.