US consider crackdown on Chinese imports of Iranian oil

DUBAI, Jul 23 (Reuters) – The United States is considering cracking down on Iranian oil sales to China as it prepares for the possibility that Tehran may not return to nuclear talks or take a tougher line if it does, said a US official.

Washington told Beijing earlier this year that its main goal is to revive compliance with the 2015 Iran nuclear deal and, assuming a timely return, it will not require Chinese companies violating US sanctions to buy Iranian crude oil to punish, said the officer.

This attitude is developing in view of the uncertainty about when Iran can resume the indirect talks in Vienna and whether the new Iranian President Ebrahim Raisi is ready to pick up where the talks ended on June 20 or call for a fresh start.

The US official said, on condition of anonymity, that Iran – which said it will not resume talks until Raisi takes power – has been “very vague” about its intentions. Continue reading

“When we’re back in the JCPOA, there is no need to sanction companies that import Iranian oil,” the official told Reuters this week, referring to the 2015 joint comprehensive action plan under which Iran would set up its nuclear program in return for relief restricted from economic sanctions.

“If we find ourselves in a world where the prospect of returning to the JCPOA soon seems to be disappearing, that attitude will have to adjust,” added the official.

The Wall Street Journal reported for the first time that Washington was considering tightening enforcement of its Iran sanctions, particularly against China.

Chinese refineries are the largest importers of Iranian oil. China’s imports of Iranian crude oil averaged between 400,000 and 650,000 barrels a day on a monthly basis this year, according to data intelligence firm Kpler, with volumes rising to nearly 1 million bpd in May. Continue reading

Reuters reported Thursday that Chinese logistics company China Concord Petroleum Co has become a key player in the supply of sanctioned oil from Iran and Venezuela. Continue reading

That US officials are hinting at a possible crackdown could be a hidden threat that Washington has an opportunity to demand a price from Tehran, said Robert Einhorn, an analyst at the Brookings Institution.

“It is likely to send a signal to Raisi that if the Iranians are not serious about returning to the JCPOA, the US will have options and there will be a cost,” Einhorn said.

How Beijing, whose relations with Washington are strained by human rights issues as far as the South China Sea, might react depends on whether it blames Iran or the United States for the impasse in the talks, Einhorn said.

WAITING FOR NEW PRESIDENT

An Iranian official said it would be a matter for the Supreme Leader of Iran if talks resume and hinted that it could do so if Raisi takes over on August 5 or a few weeks later. He also said it was unclear whether Iran’s chief negotiator Abbas Araqchi would stay.

“We should wait for the new president to take office and decide whether or not to change the nuclear team. It seems that Dr. Araqchi will not be changed, at least during the handover period,” said the official on condition of anonymity.

A second Iranian official said Raisi and his nuclear team insist on starting from scratch and refuse to resume talks where they ended in June.

“They want their own terms and conditions, and they have more demands like keeping the 60% enrichment or chain of advanced centrifuges and not dismantling them as Washington is calling for,” said the second Iranian official.

Uncertainty is forcing the United States to consider new approaches, despite US and European officials having said there are no good options for reviving the JCPOA. Continue reading

“If … we come to the conclusion that the talks are dragging on too long and we have no feeling for whether they will turn out to be a positive result, then of course we have to enforce the sanctions, including those against Chinese companies, the Iranian ones Bought oil, “the US official said, declining to predict the timing of a decision.

“It’s not … black and white,” he said. “We’ll do it based on the time it takes Iran to come back and the stance they’ll take when and when they come back.”

Reporting by Arshad Mohammed in Saint Paul, Minnesota, and Parisa Hafezi in Dubai; Additional coverage by Devika Krishna Kumar in New York; Edited by Mary Milliken, Andrea Ricci and Paul Simao

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