For the first time in a year, the world's largest oil importer, China, publicly disclosed data showing it had imported crude oil from Iran, despite the U.S. sanctions on Iranian oil exports.
China has been importing crude from the Islamic Republic all along since the sanctions on Iran entered into force in 2018, when former president Donald Trump quit the so-called nuclear deal. Yet, China has rarely officially admitted it had purchased crude from Iran.
On Thursday, Chinese customs data, cited by Bloomberg, showed that the world's top oil buyer imported in December a total of 1.9 million barrels of crude oil from Iran. This was the first public disclosure since December 2020 that Beijing is purchasing crude from the Islamic Republic, Bloomberg notes.
It is not immediately clear why China should publicly admit it continues to buy oil from Iran, but the disclosure comes amid difficult negotiations in Vienna about the U.S. and Iran possibly returning to the so-called nuclear deal. In addition, China and Iran have recently sought to advance their cooperation, including in energy, under a 25-year strategic partnership agreement signed last year.
China, Iran, and Russia are also set to begin joint naval drills in the northern Indian Ocean later this week, a public relations official from Iran's armed forces told semi-official Iranian news agency ISNA.
Cheaper crude from Iran and Venezuela while international oil benchmarks were rallying was incentive enough for China to purchase in 2021 the most crude from the two U.S.-sanctioned exporters in three years, shrugging off risks of penalties from the United States.
Chinese refiners imported 53 percent more oil from Iran and Venezuela last year compared to 2020, according to estimates from market intelligence firm Kpler cited by Bloomberg earlier this month. In total, China imported last year 324 million barrels of crude from Iran and Venezuela combined, the highest volume since 2018.
By Tsvetana Paraskova for Oilprice.com
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Comments
So for China to declare that it imported only 1.9 million barrels of Iranian crude (equivalent to 61,290 b/d) in December is very unusual and so minuscule that it may be intended either to confuse the Americans about the size of its Iranian crude imports or alternatively put pressure on Iran to be more flexible in its negotiations with the Americans over the nuclear deal by subtly telling Iran that it can indeed reduce its imports to such a low level.
However, Iran isn’t interested in a new nuclear deal unless it is on its own terms meaning that it wants the United States to lift the sanctions against it first and that it will never accept any limitations on its nuclear and missile development programmes, something the US will never accept.
That is why a lifting of US sanctions against Iran will never see the light of day now or ever because the positions of the United States and Iran are irreconcilable.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London