WASHINGTON (Reuters) – Two representatives of the Trump administration said on Friday that no dismantling or short-term abandonment of China's oil purchases from Iran would be considered after Washington had surprised Iranian customers on Monday by demanding the purchases to discontinue or impose sanctions by 1 May.
FILE FILE: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf in Iran on July 25, 2005. REUTERS / Raheb Homavandi
The government was clear to China, Iran's top oil consumer, that the sanctions granted last November did not result in any additional sanctions being lifted, one senior official said.
"They knew about it, so I do not think about it," the official said, adding that there were finally questions about a phase out for the State Department. The State Department did not respond immediately to a request for comment.
Under US sanctions laws, importers of Iranian oil, including China, India and Turkey, could be granted a phase-out before buying without oil, including a short-term waiver. Resolution measures would be different from the 180-day exemptions granted by the Trump government to China and seven other importers in November for severely curtailing oil purchases from Iran. The measures are expected to end in May.
In China, there are alternative oil suppliers, such as the United States and Saudi Arabia, officials said on condition of anonymity.
"We understand that they do not like that," the official said of China's reluctance to sanction Iran against the United States alone. "But at the same time, they tend to act pragmatically and accept what is the most reliable deal."
President Donald Trump has left the Iranian nuclear deal between Tehran and six world powers last May. Trump is now using the oil sanctions without exception to reduce oil purchases. This is a step that the Obama administration has never done when it imposed sanctions on Iran.
Trump's sanctions on Iran seek to curtail its nuclear and ballistic missile programs and reduce its influence in Syria, Yemen and other Middle Eastern countries. Obama's sanctions were aimed only at Iran's nuclear program.
After the Trump administration announced its intention on Monday to bring Iran's oil exports down to zero, the Iranian Revolutionary Guards reiterated the threat to block the Strait of Hormuz, an important shipping route linking oil producers in the Middle East to markets in Asia, Europe and North America connects.
One of the Trump officials said such a move would hurt both Iran and its allies. "Any attempt to disrupt the freedom of shipping would be primarily a weakening for Iran … and then for the reach of the international community … working hard to work for them," the official said.
If China does not reduce Iran's oil purchases to zero, the Trump administration may have to make a decision to block Chinese banks from the US financial system. This could have unintended consequences for the finances and the economy between the two largest economies in the world, which have already been negotiated in negotiations over trade disputes.
"It could be," an official admitted, to have unintended consequences, "but that's why China's decision is simple, mathematically, it's not a difficult decision for them, they do business with the US, which is critical, they do business with Iran which is not critical. "
Reporting by Timothy Gardner and Humeyra Pamuk in Washington; Arrangement by James Dalgleish and David Gregorio