China is buying roughly 50 per cent less Iranian oil than it did last year, as international sanctions strengthen its bargaining position with Iran’s national oil company, the International Energy Agency said on Friday.

China is the single largest buyer of Iranian crude, and usually takes about a fifth of Iran’s exports – about 550,000 barrels a day. But the IEA, the energy watchdog of the industrialised countries, says China is now thought to be lifting around half of 2011 volumes, probably due to a dispute over prices, and has stepped up purchases of Saudi, Russian and Angolan crude.

The remarks were contained in the IEA’s latest oil market report, in which it cut its forecast for global oil demand growth this year for the sixth consecutive month, citing a weaker global economy. It said oil consumption would increase this year by 800,000 barrels a day, down from a forecast last month of 1.1m b/d.