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A Chinese logistics company has become the key intermediary helping Iran and Venezuela to export their crude oil in defiance of the U.S. sanctions against the two OPEC members, multiple sources told Reuters for an exclusive report on Thursday.
China Concord Petroleum Co., Limited, also referred to as CCPC, was sanctioned by the United States at the end of September 2019, "for knowingly engaging in a significant transaction for the transport of oil from Iran," the then U.S. Secretary of State Mike Pompeo said. Under the sanctions, all property and interests in property of CCPC and the other Chinese entities that are in the United States or within the possession or control of a U.S. person were blocked.
CCPC, however, has become in recent months the key in moving oil out of Venezuela and Iran—exports which the U.S. has tried to choke off with the threat of imposing sanctions on anyone dealing with a designated entity or designated persons.
According to multiple sources, including Iranian officials, documents of Venezuela's state oil firm PDVSA, and tanker tracking data Reuters has checked, CCPC started dealing with Venezuelan oil and independent Chinese refiners this year. The Chinese firm has bought 14 tankers over the past year in order to ship crude oil out of Venezuela and Iran, two of Reuters' sources said.
Despite the maximum pressure campaign of the United States against the oil exports of both Venezuela and Iran, those two oil-producing nations continue to ship part of their crude overseas, and China is their key customer.
China has always said it opposes the "unilateral" U.S. sanctions against oil producers and continues to buy crude, especially from Iran.
The U.S. generally doesn't interfere with these oil sales, relying on the threat that anyone caught dealing with sanctioned oil would be cut off from the U.S. banking and financial system.
But the U.S. may now be considering going after the Chinese imports of Iranian oil. The United States is considering clamping down on Iran's rising oil exports to China as a tool to either force Tehran to conclude a nuclear deal or punish it if it does not, The Wall Street Journal reported on Monday, quoting U.S. officials and sources with knowledge of the plans.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.