China isn’t fazed by U.S. sanctions pressure and is committed to keep doing business in the Iranian energy sector, the head of a petroleum federation said.
According to state-run media in Iran, Chinese companies are keen on buying oil from Iran despite unilateral sanctions put in place by the United States.
Andrey Yu, the head of the China Petroleum and Chemical Industry Federation, was quoted by Iran’s official Islamic Republic News Agency as saying Chinese companies weren’t swayed by U.S. pressure.
“China doesn’t pay attention to the U.S. sanctions on Iran,” he said.
U.S. President Donald Trump in May withdrew the U.S. signature from the Joint Comprehensive Plan of Action, an Iranian nuclear deal signed between the five permanent members of the U.N. Security Council, Germany and Iran in 2015. The deal offered sanctions relief to Iran in exchange for peaceful nuclear commitments.
Trump’s decision set a clock ticking on renewed sanctions pressure on Iran. By November, those sanctions reach into the Iranian energy sector and could isolate as much as 1 million barrels of oil per day at a time when the market has little room for artificial shocks.
China, engaged in simmering trade disputes with the United States, has shown no signs of retreat in the face of U.S. pressure. Yu was quoted as saying Monday that Iran is one of China’s largest trading partners and it would continue to import its crude oil.
“Oil, gas and trade shouldn’t be influenced by the United States anymore,” he said.
China National Petroleum Corp. has said in the past it would step in if other companies were forced to leave the Iranian energy sector because of U.S. sanctions. On Monday, an official at the National Iranian Oil Co. said CNPC was not yet replacing French supermajor Total at the South Pars gas field off the coast of Iran, one of the largest gas fields in the world.
A week after Trump withdrew from the JCPOA, Total said it would have to leave the project before November unless it received sanctions waivers from U.S., French and European authorities. The European Union has introduced blocking statute meant to protect European companies doing business with Iran, though Trump said any company engaged with the Islamic republic would be cut off from the U.S. economy.
In an effort to facilitate economic openness, the Central Bank of Iran in April opened a line of credit with Turkey that could give Iran a way to continue trading. An agreement with China to use their respective currencies for trade could facilitate financial arrangements for both sides.