Last month, the US Treasury slapped sanctions on Chinese oil trader Zhuhai Zhengrong Ltd and its CEO Youmin Li after a Bloomberg report accused China of getting around tough US energy sanctions by putting the Iranian imports into bonded storage.
China continued imports of Iranian crude oil in July, two months after the expiry of US sanctions waivers, research from three firms tracking tanker movement has shown, according to Reuters.
According to the data, tankers unloaded between 4.4 million and 11 million barrels of crude oil in China in July, with some of the oil believed to have gone to China’s strategic oil reserves.
China’s defiance in continuing imports of Iranian oil are said to be a headache for the Trump administration, which recently estimated that between 50 and 70 percent of Iran’s oil exports now head to China, with 30 percent more going to Syria, with the latter country not concerned by US sanctions threats since it is already sanctioned itself.
Last week, Iranian Vice President Eshaq Jahangiri urged China and other countries to buy even more Iranian oil, saying US sanctions threats have failed to collapse the Iranian economy.
On July 23, Beijing strongly condemned the US’s “illegal sanctions on companies and individuals” after Washington slapped restrictions on a Chinese oil importer doing business with Iran, calling the sanctions “random” and stressing that they were a “violation of international law.”
China is the only major traditional importer of Iranian crude oil not to have bowed to US sanctions pressure, with most other major importers, including India, Italy, Japan, South Korea, Greece and Turkey stopping imports out of fear of US sanctions. Before sanctions snapped into place, China relied on Iran for about 20 percent of its total imports, with this figure declining to about half that after the expiry of US sanctions waivers.
Last month, US officials told Politico that the State Department was considering making an exception for China in its energy sanctions strategy against Iran, because there wasn’t much Washington could do to respond “if China says, ‘Screw you’.”
Last week, the Bank of America warned that China’s continued purchases of Iranian crude threatened to trigger an oil market crash, to “undermine US foreign policy” and “cushion the negative terms-of-trade effects on the Chinese economy of rising US tariffs.”
The US slapped hard-hitting banking and energy sanctions on Iran after withdrawing from the Iran nuclear deal in May 2018, beginning a “maximum pressure” campaign aimed at bringing the oil-rich country’s energy exports down “to zero” and collapsing the Islamic Republic’s economy.