The Biden administration has reportedly warned Beijing that it will enforce Trump-era sanctions against Iranian crude oil exports as shipments from Iran to China have leapt.
As reported by bne IntelliNews nine days ago, it is thought that Iran has “quietly” moved record volumes of crude oil to top client China, while India’s state refineries have added Iranian oil to their annual import plans on the assumption that US sanctions on Tehran will soon ease in the Biden era.
Iranian oil exports to China have been increasing “for some time now,” a senior US administration official familiar with the Iran issue was cited as saying by the Financial Times in an interview published on March 17. The daily quoted the official as stating: “We’ve told the Chinese that we will continue to enforce our sanctions. There will be no tacit green light.”
Oil market participants have speculated that the Biden administration is turning a blind eye to Iran’s expanding oil exports to China and other countries as part of a strategy to encourage Tehran to enter into negotiations over reviving the 2015 nuclear deal, which former US president Donald Trump unilaterally abandoned in May 2018. The Biden administration has made returning to the deal—a move that would bring about the end of the sanctions—a priority but wants Iran to return to full compliance with it first. Tehran, on the other hand, has told Washington it will agree to such compliance, but only after US sanctions are dropped.
China imported around 478,000 b/d of oil from Iran on average in February, according to data from energy research company Kpler, and this was expected to increase to about 1m b/d in March—one of the highest monthly purchases on record, reported the FT. Iran is known to have been offering steep discounts on its oil to buyers willing to risk secondary sanctions.
Since Trump switched to a policy of attempting to drive Iran’s oil exports to zero, the Iranians have also stepped up the use of ghost tankers that are a challenge to track. Amrita Sen of consultancy Energy Aspects told the FT they often carry crude oil that is stored at sea for months, adding: “We always knew these barrels would come out; it was a question of when.”
Iran has exported crude and condensate—an ultralight oil—to China by disguising its barrels most recently as Omani ones, Kpler said this week. The financial daily reported Kpler as saying that four Iranian tankers removed their transponders and transferred them to other vessels at an Omani port, before going on to Iran to load almost 8m barrels of oil collectively after which they returned to Oman to pick up the transponders on the way to China.
Iran’s way towards having US sanctions removed has been complicated by an increasing rift on nuclear deal policy between its pragmatic, moderate Rouhani government and regime hardliners who claim the backing of the country’s supreme leader.
President Hassan Rouhani—who will leave office a short period after June’s Iranian presidential election—on March 17 in televised remarks accused hardline opponents of obstructing efforts to lift US sanctions.
“It is a great betrayal of the Iranian nation if any faction or person delays the end of the sanctions even for one hour,” Rouhani said.“The small minority that is obstructing this path needs to stop its destructive act. If it stops … the government can break the sanctions,” Rouhani added without elaborating.
Turkey currently has 25 deportation centres, all filled to capacity with mostly Afghan refugees, and it plans to build eight more, VoA reported on August 31 in a ... more
The US and Iran appear to have edged closer to an agreement that would see a revival of the 2015 nuclear deal. Indirect talks in Vienna last week—in which European diplomats shuttled between the ... more
Officials from the UK, France and Germany are shuttling between two hotels in Vienna, serving as intermediaries between a US delegation and an Iranian delegation who are de facto in indirect ... more