World

US reaches out to China on cutting Iran oil purchases

Chinese companies’ business believed to have helped keep Iranian economy afloat despite American sanctions

Updated 5 years ago · Published on 29 Sep 2021 9:00PM

US reaches out to China on cutting Iran oil purchases
Year-to-date, Chinese oil imports from Iran have averaged at 553,000 barrels per day through August, estimates commodity analytics firm Kpler. – Reuters pic, September 29, 2021

WASHINGTON/PARIS – The United States has reached out to China diplomatically about reducing its purchases of Iranian crude oil, said US and European officials yesterday, as Washington seeks to persuade Tehran to resume talks about reviving the 2015 nuclear deal.

Purchases of Iranian oil by Chinese companies are believed to have helped keep Iran’s economy afloat despite US sanctions designed to choke off such sales to put pressure on Tehran to curb its nuclear programme.

“We are aware of the purchases that Chinese companies are making of Iranian oil,” said a senior US official who spoke on condition of anonymity because of the sensitivity of the matter.

“We have used our sanctions authorities to respond to Iranian sanctions evasion, including those doing business with China, and will continue to do so if necessary.

“However, we have been approaching this diplomatically with the Chinese as part of our dialogue on Iran policy, and think that, in general, this is a more effective path forward to address our concerns.”

Separately, a European official said this was one of the issues raised by US Deputy Secretary of State Wendy Sherman when she visited China in late July.

The official, who also spoke on condition of anonymity because of the sensitivity of the nuclear diplomacy, said China has been protecting Iran, and suggested that one of the main issues for the West is how much oil Beijing is buying from Tehran.

The US State Department did not immediately respond to a request for comment on the statements by the US and European officials.

Commodity analytics firm Kpler estimated that year-to-date, Chinese oil imports from Iran averaged at 553,000 barrels per day through August.

Indirect US-Iranian talks about reviving the 2015 deal that began in April adjourned in June two days after hardliner Ebrahim Raisi was elected Iran’s president, replacing Hassan Rouhani, whose administration had negotiated the agreement.

Under the deal, Iran agreed to place limits on its uranium enrichment programme, which is one possible pathway to develop the fissile material for a nuclear weapon, in exchange for the easing of US, United Nations and European Union economic sanctions. Iran has denied seeking a nuclear bomb.

In 2018, then US president Donald Trump abandoned the agreement and reimposed harsh economic sanctions that have crippled Iran’s economy, though Tehran has continued to make illicit oil sales to customers, including Chinese firms.

After waiting about a year, Iran responded to Trump’s abrogation of the deal by starting to carry out some of the nuclear activities that it had agreed to curb under the pact, formally called the Joint Comprehensive Plan of Action (JCPOA).

Trump’s successor Joe Biden has said he is putting “diplomacy first” with Iran, but if negotiations fail, he is prepared to turn to other unspecified options.

A French presidency official told reporters yesterday that Tehran must return to the Vienna talks on the US and Iran resuming compliance with the deal in order to avoid a diplomatic escalation that could jeopardise the negotiations.

“We need, in this phase, to stay in close contact and closely united with all of the members of JCPOA, including the Russians and Chinese.

“In particular, we expect the Chinese to express themselves and act in a more determined way. We need to exert pressure, which is indispensable, on Iran.”

Iran’s foreign minister said as recently as Friday that the country will return to talks on resuming compliance with the nuclear deal “very soon”, but gave no specific date.

It is unclear how receptive China may be to any US diplomatic overtures on Iran.

US-Sino relations have sunk to their worst state in decades this year, with scant progress on issues ranging from human rights to transparency over the origins of Covid-19.

In a September 24 briefing, a Chinese Foreign Ministry spokesman put the onus on the US rather than Iran.

“As the one that started the new round of tensions in the Iranian nuclear situation, the US should redress its wrong policy of maximum pressure on Iran, lift all illegal sanctions on Iran and measures of long-arm jurisdiction on third parties, and work to resume negotiations and achieve outcomes at an early date.” – Reuters, September 29, 2021

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