Reuters says in its report “Trump’s sanctions on Iran tested by oil-thirsty China, India” yesterday that in order to reimpose sanctions on Iran, the US wants Iran’s major oil customers to refrain from purchase of Iran’s oil.
Two of Iran’s five major oil customers India and Turkey have difficulties to obey. They fear rise of oil price due to reduction of world oil supply caused by the sanction.
Iran’s largest oil customer China, however, has geopolitical consideration. Since the US regards it as trade war enemy, it shall help Iran to counter US sanctions like that it has been doing for Russia. The core of China’s united front against the US is its alliance with the enemies of the United States.
True enough, on October 25, Reuters says in its report “Iran to boost oil supplies to China in October-November: Rosneft CEO”, “Iran plans to supply more than 20 million barrels of crude oil to the Chinese port of Dalian in the October-November period, up sharply from the usual monthly volumes of up to 3 million barrels, Igor Sechin, the CEO of Russian oil major Rosneft, said on Thursday.”
China will pay Iran Renminbi for its oil due to US financial sanction so that Iran will buy much more goods from China. That will partially compensate China’s loss in US market due to US trade war with China.
Moreover, increase of oil purchase from Iran may reduce Russian oil supply to China so that Russia may sell more oil to Japan and South Korea that are also oil=thirsty. Both Japan and South Korea are US trade war targets and both of them want to expand their shares in China’s vast market.
If India and Turkey need Iranian oil, China certainly will not take all Iranian oil but will left some for them. It can even help India build pipelines to get oil and gas from Iran through Pakistan.
China- and Russian-led Shanghai Cooperation Organization (SCO) has already taken in India and Pakistan. It may soon take in Iran as Iran is applying for SCO membership. Then SCO will be quite a large new cold war camp to counter the US with other Asian countries including Japan and South Korea as its peripherals.
Where is US camp of cold war? It even has difficulties in its relations with its European allies.
Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-iran-nuclear-oil/trumps-sanctions-on-iran-tested-by-oil-thirsty-china-india-idUSKCN1N30GW.