Japanese wholesale oil traders are starting to wind down their Iranian oil orders ahead of the November 4 deadline when U.S. sanctions against Tehran are set to kick in. Other large Asian consumers, however, are looking for—and finding—ways to continue importing Iranian crude despite the sanctions.
China, for one, has found a solution by switching to Iranian tankers, property of the National Iranian Oil Company, which are also insured by Tehran. Beijing has made it clear it will not bow to Washington’s pressure--especially amid the escalating trade conflict between the U.S. and China that could see tariffs on another US$200 billion worth of Chinese goods imposed by this week’s end.
Indian state refiners have also shifted to Iranian tankers after the government allowed them to do so as a way of avoiding a violation of U.S. sanctions. India has stated it has no intention to stop importing Iranian oil or harm its trade relation with Tehran in any way but it is in a more difficult position than China as it is officially an ally of the U.S.
This week, State Secretary Mike Pompeo and Defense Secretary James Mattis arrived in new Delhi to push Washington’s “zero imports” strategy. Media reports suggest the “zero import” missions will fail, although India may agree to a reduction to avoid harming its relations with the United States. Pompeo suggested that some temporary waivers might be handed out.