To continuously buy oil from Iran, China will use Tehran's very own ships to transport its crude imports. This shall assure Beijing of continued supply of oil despite economic sanctions imposed by the United States on Tehran.
China is standing its ground with Iran while most companies in Europe, as well as Japan, South Korea, and India had already halted their purchases of oil from one of OPEC's largest oil producer aside from Saudi Arabia. This week, France's Total has already quit from the project which involved developing South Pars Gas in Iran. The company said it was compelled to do so to protect its other operations with Washington.
The United States wanted to halt Iranian oil exports until it agrees to renegotiate its 2015 nuclear agreement with the P5+1 group of world powers which include the United Kingdom, France, China, Russia, and Germany. Washington decided to withdraw from the deal, believing that it was inadequate to stop Iran from meddling in the Middle East and that the deal was weak to stop Tehran from making an atomic bomb. President Donald Trump asserted that the deal was flawed and required review and amendments.
As more countries bow to pressures from Washington, China's Zhuhai Zhenrong Corp and Sinopec Group found a way to defy it. Anonymous sources told Reuters that they will instead have all their imports shipped by vessels owned by the National Iranian Tanker. Sources with direct knowledge of the matter said the oil refiners have sealed long-term supply contracts with Iran. The agreement included a clause which states that Tehran will cover all expenses that involved costs of crude delivery and handling insurance.
The first round of U.S. sanctions on Iran took effect on Aug. 7. This involved freezing any trade deals with Tehran from the U.S. financial system. Specifically, the sanctions targeted Iran's gold and metal trading, buying of U.S. dollars, and the country's car industry.
By November, Washington wants all purchase of Iranian oil to stop. This may also include restrictions over bank dealings.
The Trump administration knew that China has no plan of halting its commercial ties with Iran, a source from the U.S. State Department told Reuters. Still, Washington will proceed with all forthcoming sanctions, the source said.
On Aug. 22, U.S. National Security Adviser John Bolton told a press conference in Israel that its sanctions on Iran are having a strong effect on its economy and gaining popular public opinion. The sanctions come at a time when Iranians are protesting sharp price increase, rising unemployment, and widespread corruption.
