OREANDA-NEWS. December 04, 2014. Iran leased oil storage at Dalian port in China earlier this year and has made at least two deliveries of crude from there to India and one to South Korea, according to sources with knowledge of the matter.

Iran, besides having to cope with western sanctions that have cut its oil exports by more than half, has been battling along with other Middle East producers to hold onto market share in Asia as softening global prices have hit its economy.

Saudi Arabia and the United Arab Emirates have already been leasing storage in Japan and South Korea for a number of years to give them supply depots near their largest customers.

Iran's lease of oil storage in China came to light in August when Indian customs questioned state oil company National Iranian Oil Company (NIOC) about a cargo of crude for delivery to Mangalore Refinery and Petrochemicals Ltd, said an Indian government official and industry source.

The vessel carrying the cargo, the Varada Lalima, had appeared to come from Malaysia, but the loading port was listed as being in Iran, the two said.

"Then NIOC told customs the vessel had come from Malaysia and the parcel had been loaded in China where they have storage," said the Indian industry source.

NIOC has been leasing tanks for oil in the northeastern port of Dalian since earlier this year, confirmed a Beijing-based source with direct knowledge of the storage deal.

The oil is held in bonded tanks, and can be sold into China or transhipped, the Beijing source said. The leases were primarily to serve North Asia, said the source, adding that at least one delivery had been made to South Korea.

Ship tracking data available on the Thomson Reuters terminal shows the Singapore-flagged Varada Lalima, which the Indian government source said was carrying 90,000 tonnes of Iran's Norouz crude, left China in May and arrived in India in August.

Documents seen by Reuters also show the vessel Sanchi with 145,500 tonne of Iran heavy oil was loaded from Dalian and reached India on Oct. 26.

Western powers and Iran are in talks this week to hammer out a final deal to lift all sanctions against Tehran in exchange for curbs to its nuclear programme.

The sanctions have cut Iran's oil exports to around 1 million barrels per day from about 2.2 million bpd in 2011.