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China refuses US demand to cease Iran crude purchases

China refuses US demand to cease Iran crude purchases

Mubasher: The US reportedly failed to convince China to cease its oil purchases from Iran, a blow to President Donald Trump’s attempt to shut down Tehran.

Nevertheless, Beijing agreed not to raise Iranian crude imports, Bloomberg News reported on Friday, citing two officials familiar with the talks, as negotiations with China and other countries are ongoing. This would ease worries that Beijing would seek to throw a wrench into Washington’s efforts to shut down Iran’s vital oil exports.

The news came at the time when US officials were paying visits to the world’s capitals, in a bid to strangle Iran’s oil sales by early 4 November, when US sanctions against Tehran are set to take effect. The US assistant secretary of state for the Bureau of Energy Resources Francis Fannon was recently in China to discuss sanctions, a State Department spokesperson told the news outlet.

As US President Donald Trump pushes for trimming the Iranian crude exports to “zero” by early November, chances to achieve the target are unlikely, according to the majority of economists.

The US administration withdrew from the 2015 nuclear accord with Iran, re-imposing sanctions against Tehran, on the grounds that the deal was fatally flawed. Other major powers, including Russia, Germany and China, who were parties to the agreement, criticised the US unilateral action.

In response, Washington threatened that even allies would face sanctions in the event of showing no “significant” progress in cutting the Iranian oil purchases, saying that it would not provide any sanction waivers.

The reports also came amid speculations floating in the market over how much the US sanctions would erase from Iran’s oil supplies.

Some analysts expect that China would ramp up its purchases of cheap supplies from the country, offsetting cuts by other importers. Previously, Beijing condemned the unilateral sanctions by the US.

China raised its monthly crude imports from Iran by 26% in July, while the Tehran’s top oil buyer accounted for 35% of Iranian exports, according to Bloomberg’s gathered shipping data.

Countries, including South Korea and Japan, are trimming their purchases of Iranian oil ahead of November, to evade the risk of losing access to the US financial system.

By 10:25 am GMT, US Nymex futures went down 0.30% to $68.75 per barrel (pb), while international Brent crude futures fell 0.37% to $73.18 pb.