US Penalties ‘Have Not Deterred Much’ of Sino-Iran Oil Trade

EghtesadOnline: Newly announced US sanctions aimed at harming petroleum and petrochemical trade between Iran and China will not substantially impact China's status as the top importer of Iranian crude, analysts said.

News ID: ۷۴۹۵۵۰

26 January 2020

"With these new sanctions, the US is essentially mowing the lawn on Chinese trade," said Henry Rome, an Iran analyst with the Eurasia Group, news wires reported.

"US sanctions have thus far not deterred much of it, hence the US needs frequent rounds of new actions", Financial Tribune quoted him as saying

Late Thursday, the US treasury and state departments announced new sanctions on petrochemical and petroleum companies in Hong Kong, Dubai and Shanghai for facilitating oil, petrochemical, and refined product exports from the National Iranian Oil Company.

According to the treasury, one company, a Hong Kong-based broker ordered the transfer of money to NIOC for Iranian petrochemical, crude, and petroleum products shipped to the UAE and China in 2019.

The sanctions come as Iranian crude oil and condensate exports plummeted in December 2019, according to cFlow, Platts trade flow software data and shipping sources. Yet China remains the largest importer, taking in 201,000 b/d in December.

With little hope of sanctions relief in the near term, Iranian oil exports will be capped at much lower levels this year compared to the recent past, especially after the signing of the nuclear deal in 2015 between Iran and the six world powers.

Donald Trump, the embattled US president, unilaterally abandoned the historic deal in late 2018 and imposed tough new sanctions on Iran’s key sectors, namely oil, banking and shipping.  The hostile move has been rejected by senior statesmen in many countries, including in the United States and its close allies in Europe.

Richard Nephew, the principal deputy coordinator for sanctions policy at the US State Department during the Obama administration, said Friday that this week's sanctions will do little to disrupt this trade.