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China cuts some of its oil trade with Iran after pledging for months to resist the US sanctions on exports, giving Washington an unexpected boost in its efforts to isolate the Islamic Republic.
This decision comes as Saudi Arabia, seeking to alleviate the crisis in external relations, said this month it would increase oil supply, lower prices and give traders other options outside Iran.
The decision made by Beijing, Iran's biggest customer, gives the United States a basic element in an economic barrier around Iran as it prepares to renew sanctions on the country's energy sector. beginning of November.
China National Petroleum Corp. and China Petrochemical Corp., China's largest oil refiners, have not booked any Iranian cargo for November, according to sources close to the case. China imports about 600,000 barrels of Iranian crude daily.
Bank of Kunlun, owned by CNPC, has announced to its Iranian customers that it will stop doing business with them by the deadline for the filing of sanctions on November 4, according to customers in Tehran.
The Bank of Kunlun was the main Chinese bank to make payments for Iranian oil exports and finance goods exports from Beijing to Tehran. The suspension of payments will make this case with Iran less attractive to both parties.
CNPC, Sinopec and Kunlun did not respond to requests for comment.
The United States indicated that it was discussing with its partners and allies the application of sanctions. A US official said Washington had made many contacts with China on the subject.
The latest Saudi announcements aimed at increasing availability were made this week as the kingdom sought to ease tensions over the assassination of Saudi dissident journalist Jamal Khashoggi on 2 October.
"This has helped the sanctions and harmed Iran," said Adel Hamaizia, associate member of the Middle East at the Royal Institute of International Affairs in London.
The statements have brought oil prices down to about $ 75 a barrel from recent highs of about $ 85 a barrel. With this decline, "refiners can replace Iranian oil at an affordable price," said Homayoun Falakshahi, an analyst at the British consulting firm Wood Mackenzie, specializing in Iran.
The United States now has more weight on countries that had hesitated to accept sanctions, said a US official. Any derogation or derogation to continue to buy Iranian oil beyond early November will be limited in time, the goal being to reduce to zero Iranian exports, said the official.
"Waivers may not be necessary because [Tehran’s oil buyers] stop trading with Iran even before the sanctions start, "said the official.
Even before the Chinese movement, the reduction in purchases had eroded Iranian production.
Iranian production fell to 3.3 million barrels a day in early October, according to a person familiar with the production data. That represents a drop of 3.8 million barrels a day in May, when President Trump decided to withdraw from a nuclear deal with Iran and begin the process of reinstating the sanctions .
European refiners such as France
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Cepsa in Spain have stopped buying Iranian oil while others like the
Saras
SpA and
Eni
SpA are in the process of liquidating trades.
India is among the countries that are negotiating with the United States for possible sanctions, said a US official, adding that any exemption would be limited to giving India more time to find replacement providers.
India imported about 500,000 barrels of oil a day from Iran last month, according to Sweden's TankerTrackers.com. But he told the oil companies that he was planning to reduce that amount to 300,000 barrels a day in November.
Mr Trump, questioned on October 11 about the decision of some countries like India and China to continue buying Iranian oil, told reporters: "We will take care of it."
The United States has been pressuring the Saudis to maintain the supply of oil to meet demand as Iranian oil is cut.
While the international reaction to Mr. Khashoggi's murder this month at the Saudi Arabian consulate in Istanbul has further prompted Saudi Arabia to abide by this decision, Saudi Oil Minister Khalid Al-Hariri Falih, stepped up plans to increase supplies.
This week, he promised a new production increase of 300,000 barrels a day, without ruling out a further increase of 1 million barrels a day, if necessary.
Write to Benoit Faucon at [email protected]
