US Sanctions on Iran Spark Scrutiny of China's Oil Purchases

Reuters articles focus on market reactions and geopolitical implications, while Dawn provides detailed trade statistics and Chinese procurement practices.

Iranian court orders U.S. oil sale proceeds to compensate sanctions-hit EB patients  Xinhua

China has for several years been the biggest buyer of Iranian oil, putting its purchases in the spotlight as the US threatens heavy economic sanctions on Tehran. US Treasury Secretary Scott Bessent was scheduled to hold a press conference on Monday night. Here are the key details on China’s oil trade with Iran, which last year averaged 1.4 million barrels per day (bpd), according to ship-tracking firm Kpler. How much oil does China currently buy from Iran? Less than it used to. The US renewed its blockade of Iran’s ships and ports on July 13 in an attempt to cut off oil sales as a deal to halt their war broke down, throttling Iranian exports. There have been no visible crossings of the Strait of Hormuz since then, according to Kpler data, although many vessels turn off their location transponders, making them difficult to track. Shipments fell to 785,000 bpd in June, the lowest since February 2023 and probably rose in July to 823,000 bpd, but the intake so far in August has dropped to 534,000 bpd, provisional Kpler data showed. Who are the Chinese buyers? Chinese independent refiners have been the main Iranian crude buyers, attracted by what has typically been a steep discount to mainstream barrels. China’s big state refiners have shunned Iranian oil since 2019, when the US reimposed sanctions on Tehran, and China’s official customs data does not show any purchases of Iranian crude. Iranian oil delivered to China has long been branded as Malaysian, and more recently Indonesian, and is settled in Chinese currency, trading in a tight loop involving a chain of difficult-to-track intermediaries, refinery sources and traders involved in the business have said. Have previous US sanctions been effective? Washington has intensified its efforts to clamp down on Chinese purchases of Iranian oil since President Donald Trump returned to the White House early last year, imposing sanctions on mostly smaller Chinese refiners and other participants in the supply chain, which have in some cases proven disruptive. The US Treasury Department has also warned two larger Chinese banks that they could face secondary sanctions if Iranian funds were found moving through their systems, but has stopped short of designating them. In April, Washington imposed sanctions on Hengli Petrochemical (Dalian) refinery, along with about 40 shipping firms and vessels, accusing Hengli of buying billions of dollars worth of Iranian oil, escalating its efforts to curb Tehran’s oil revenue. Hengli has denied buying Iranian oil. However, sanctions themselves have done little to slow overall flows of Iranian oil into China. China’s Iranian oil imports stood at 1.24 million and 1.58 million bpd in January and February, respectively, Kpler data showed. What does China say? China, which has said it rejects unilateral sanctions, has called for a resolution through diplomatic and political means.

Looming US sanctions on Iran put China oil buying in spotlight  Reuters

European shares slip as tech drags; Iran sanctions in focus  Reuters

In the lead-up to impending US sanctions on Iran, oil prices fell as investors capitalized on recent gains. As Washington prepares to unveil its most stringent measures Monday, the potential for disruptions in Middle Eastern oil supply looms large. Iran's rejection of these sanctions, coupled with its threat to cut oil exports from the Gulf, adds a layer of uncertainty to global energy markets that stakeholders are closely monitoring.

Shares, oil dip as US sanctions on Iran loom  Reuters

Oil falls ahead of US announcement of new sanctions on Iran  Reuters