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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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U.S. Steps Up Efforts To Sanction Iranian Crude

  • Iranian President Raisi visits Beijing this week,
  • The U.S. is stepping up efforts to enforce sanctions on Iran’s energy exports.
  • China imported record volumes of Iranian crude in December 2022.
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The world’s largest crude importer and main customer of Iranian oil, China, is seeking increasingly closer ties with Iran while the United States steps up pressure on the Islamic Republic’s oil exports.   

Chinese President Xi Jinping pledged to continue to develop “friendly cooperation” with Iran during a visit of Iranian President Ebrahim Raisi to Beijing this week.    

“Xi stressed that China supports Iran in safeguarding its sovereignty, independence, territorial integrity and national dignity, supports Iran in resisting unilateralism and bullying, and opposes external forces interfering in Iran’s internal affairs and undermining Iran’s security and stability,” according to a readout of the talks reported by Chinese news agency Xinhua. 

The visit of Raisi to China – the first of an Iranian president in many years – comes less than a week after the U.S. stepped up efforts to pressure Iran’s revenues by sanctioning nine companies for producing, selling, and shipping Iranian petroleum and petrochemicals in Asia. 

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned six Iran-based petrochemical manufacturers or their subsidiaries and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of petroleum and petrochemicals. 

“The Biden Administration will not hesitate to take action against sanctions evaders, and we are determined to step up our enforcement in light of Iran’s continued, alarming nuclear advances,” Robert Malley, the U.S. Administration’s special envoy for Iran, said, commenting on the latest round of sanctions. 

“China is the main destination of illicit exports by Iran,” Malley told Bloomberg Television last month, adding that discussions with China would be “intensified” to dissuade it from buying Iranian oil. 

Related: Global Oil And Gas Industry Sees Profits Soar To $4 Trillion

It’s no secret that the bulk of Iran’s oil exports are going to China via a dark fleet of tankers or the falsification of documents to pass off the crude as originating from countries other than Iran, most recently from Malaysia.

In recent weeks, signs have emerged that Iran has boosted its oil exports, especially to China. At the end of 2022, Iranian exports are estimated by vessel-tracking companies to have exceeded 1 million barrels per day (bpd) and are even believed to have hit 1.3 million bpd in November, the highest levels since 2019. 

China imported record volumes of Iranian crude in December 2022, while Iran’s crude and condensate exports reached a record high under sanctions in the last month of 2022, Armen Azizian, Crude Market Analyst at Vortexa, said in a report in January. 

With Russia aggressively pushing to sell its crude in China after the Russian invasion of Ukraine and the Western embargoes on Russia’s oil, tankers switched from shipping Iranian oil to trade with Russian crude. However, the fourth quarter of 2022 saw net fleet additions to the Iranian trade in oil, Azizian said. 

So, during the meeting with the Iranian president in Beijing on Tuesday, Xi said that “China will unswervingly develop friendly cooperation with Iran, push for new development of the China-Iran comprehensive strategic partnership, and play a positive role in world peace and human progress.” 

China and Iran will aim to “deepen practical cooperation on trade, agriculture, industry and infrastructure,” Xi said. 

The Iranian president’s visit to China comes just two months after Xi visited Iran’s regional rival, Saudi Arabia

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In early December, the Chinese president met with Saudi King Salman and Crown Prince Mohammed bin Salman in Riyadh and vowed to expand oil trading between the nations. 

“China will increase communication and coordination with Saudi Arabia on energy policy, expand the scale of crude oil trade, enhance cooperation on exploration and development, and deliver on the Sino-Saudi Gulei Ethylene Complex Project and other large-scale energy cooperation projects,” Xi said while in Saudi Arabia. 

“The two sides commended their oil trade volume and the great foundations of the cooperation due to the Kingdom’s ample oil resources and China’s broad markets,” a joint statement at the end of the Saudi-Chinese summit in December read.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on February 16 2023 said:
    If years of tough US sanctions against Iran have miserably failed to cripple Iran’s oil industry and its exports, would anyone in his full faculties believe that sanctioning six Iran-based petrochemical manufacturers or their subsidiaries and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of Iranian petroleum and petrochemicals will succeed?

    Despite the harsh sanctions, Iran is reported to have been managing to export 1.5 million barrels a day (mbd) more than1.0 mbd of which going to China. The former Iranian foreign minister Mohammed Jawad Zarifit used to taunt the United States by boasting publicly that Iran has invented the art of evading US sanctions and will teach it to others for a price.

    But what was very telling is the Chinese President Xi Jinping’s tough words for the United States when welcoming The Iranian President Ebrahim Raisi in Beijing. He stressed “that China supports Iran in safeguarding its sovereignty, independence, territorial integrity and national dignity, supports Iran in resisting unilateralism and bullying, and opposes external forces interfering in Iran’s internal affairs and undermining Iran’s security and stability,” according to Chinese news agency Xinhua.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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