Defying comprehensive US sanctions, China is continuing to buy Iranian oil.
Last week Beijing took its first delivery of Iranian crude since the Trump Administration ended sanctions waivers in May for Iran’s largest customers: China, Japan, South Korea, India, and Turkey.
TankerTrackers said the tanker Salina — a Suezmax vessel which can carrying about 1 million barrels — docked on June 20 near Qingdao in northeast China, unloading its cargo over the following two days.
China’s market data shows purchases from Iran are down month-on-month, but the shipment indicates that the Chinese will not accede to the Trump Administration’s demands to reduce Iranian sales to “zero”.
China takes about half of Iran’s oil exports, which are officially about 1 million barrels per day — down 60% from the level of April 2018.
Analysts say Iran may be moving up to 400,000 barrels per day on grey or black markets, for example, by turning off transponders on tankers.
The Chinese position vis-a-vis US sanctions, tightened this spring, is complicated by Donald Trump’s trade war with Beijing. In early May, Trump raised the tariff from 10% to 25% on $200 billion of Chinese products, and he has threatened to impose the duty on the remaining $350 billion of Beijing’s exports to the US.
Despite continued trade with China, Iranian officials are scrambling to find markets to maintain even the reduced level of sales. Tehran has discounted prices, and is even putting oil on the stock market for purchase.
In January, an official complained that Iran could not export even “one additional barrel” because of the US pressure.