Bloomberg: China Promised the U.S. Not to Increase Oil Imports from Iran

Bloomberg reported on Friday, August 12, citing two informed sources, that China rejected the U.S. request to cut oil imports from Iran but promised not to increase them. This report comes a day before Iran's oil sanctions are set to take effect on August 13. The U.S. aims to pressure the Islamic Republic and bring it to the negotiating table by forcing Iran's customers to cut or significantly reduce their oil purchases. The United States officially withdrew from the JCPOA on May 8. Following that, the U.S. State Department's policy director announced on July 2 that a new round of severe sanctions against Iran would be implemented starting August 13, with the next phase beginning on November 4, aiming to reduce Iran's oil exports to zero. Bloomberg adds that negotiations between the U.S. and China, as well as other countries that purchase Iranian oil, are ongoing. Bloomberg writes that although the Trump administration is pursuing a policy of completely cutting Iran's oil exports, many experts believe such a goal is impractical. According to the report, Francis Fannon, the U.S. Assistant Secretary of Energy, recently traveled to China to discuss Iran's sanctions. The Trump administration states that if Iran's customers do not show a 'significant' reduction in their oil purchases, they will face sanctions. Additionally, the U.S. Treasury Department had previously announced that if China, Russia, and Europe continue to buy oil from Iran, they will be subject to U.S. sanctions. Bloomberg reported on Friday that Japan and South Korea are currently reducing their oil purchases from Iran ahead of the sanctions. However, China, which is Iran's largest oil customer, increased its oil purchases from Iran by 26% last month. According to the report, China was the buyer of 35% of Iran's total oil exports last month. Based on Reuters' statistics, China imported an average of just over 631,000 barrels of oil from Iran daily in the first half of the year, showing an increase of nearly 7% compared to the same period last year. China is also engaged in a tariff battle with the U.S. On Friday, Reuters reported, citing three informed sources, that Chinese oil giant Sinopec has stopped buying oil from the U.S. and does not plan to purchase oil from the U.S. until at least October. China recently imposed a 25% tax on oil and petroleum product imports from the U.S., but it is still unclear when this law will take effect. The U.S. exported nearly 335,000 barrels of oil per day to China this year. Sinopec is the largest Chinese buyer of U.S. oil, which had planned to purchase 300,000 barrels of oil per day from the U.S. this year.