The U.S. Department of State is discussing allowing China to import oil from Iran as payment for a Chinese company’s investment in an Iranian oilfield, Politico reported on Wednesday, citing U.S. officials and sources.
The Trump Administration is discussing issuing China a waiver to a 2012 U.S. act on Iranian sanctions that would allow Beijing—Iran’s single biggest oil customer—to import oil from Iran, three U.S. officials told Politico.
The discussions revolve around giving China a waiver to import Iranian oil in exchange for investments that China’s Sinopec has made in an oilfield in Iran. U.S. administration officials have offered Sinopec to grant a waiver for the repayment in oil in official correspondence between the Chinese company and the U.S. Department of State, a source familiar with the matter told Politico.
The report that the U.S. is mulling over a kind of lenient treatment of Chinese imports of Iranian oil comes days after numerous media reports pointed to China already receiving Iranian oil cargoes despite the U.S. sanctions on Iran’s oil, while the official U.S. position continues to be driving Iran’s oil exports down to zero as soon as possible.
Now that there are no sanction waivers for Iranian oil buyers, the United States will sanction any imports of crude oil from Iran, the U.S. Special Representative for Iran, Brian Hook, said on Friday, reiterating comments he made last month amid reports that China has already imported its first crude oil cargo from Iran that breaches the U.S. sanctions.
“We will sanction any illicit purchases of Iranian crude oil,” Hook said.
Hook added that the U.S. would be looking to check reports that Iranian crude oil tankers have departed and arrived in China after the U.S. removed all sanction waivers for all Iranian crude oil customers.
Last week, an analysis of TankerTrackers showed that Iran had delivered the first crude oil to a Chinese refinery complex since the United States removed as of May the sanction waivers for Iran’s oil buyers.
By Tsvetana Paraskova for Oilprice.com
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Since US sanctions against Iran were introduced, China has never stopped even for one minute buying Iranian crude. The same applies to India and Turkey.
I have repeatedly been telling you that China is not Djibouti. It is a superpower in its own right with the world’s largest economy based on purchasing power parity (PPP). Therefore, it doesn’t need US permission to buy oil from Iran or Venezuela.
And while the US Special Representative for Iran Brian Hook is free to sanction what he describes as “illicit purchases of Iranian crude oil”, China and for that matter India and Turkey will not lose a minute’s sleep over his sanctioning.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London