A leading Chinese bank, which acted as the main conduit for payments to Iran, is halting financial transactions with the Islamic Republic, Reuters news agency reports. The state-owned Bank of Kunlun’s decision was made “under pressure” of impending U.S. sanctions due to take effect early November, news reports disclose.

The halting of transactions spells trouble for Iran’s commercial ties to China, the country’s biggest oil consumer. The Bank of Kunlun is controlled by China’s state-owned energy group CNPC, a company running multi-billion dollar gas exploration projects in Iran.

With other oil importers pulling out in the wake of impending U.S. sanctions, Tehran is counting on Beijing to keeps its oil-based economy running. So far, China has officially refused to cut Iranian oil imports.

Despite Beijing’s defiant posturing, Chinese state-run oil companies have shown little appetite to bust U.S. sanctions. CNPC and another leading Chinese oil company, Sinopec Group, have shied away from placing crude oil orders for the month of November, indicating their reluctance to defy Washington.

Reuters news agency reported the Chinese bank’s decision to halt transactions with Tehran:

Bank of Kunlun Co, the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent U.S. sanctions against the country, four sources familiar with the matter told Reuters.

Kunlun, the main official channel for money flows between China and Iran, has verbally informed clients that it will stop accepting yuan-denominated Iranian payments to China from Nov. 1, said the sources, who include external loan agents and business officials who trade with Iran.

The bank, controlled by the financial arm of Chinese state energy group CNPC, had already quietly suspended euro-denominated payments from Iran in late August, the four sources said, declining to be named due to the sensitivity of the matter.

The move is yet another success for President Donald Trump’s strategy to isolate Iran. His decision to withdraw from the 2015 nuclear deal and reinstate sanctions on the Shi’a Islamist regime has forced major European companies to pull out of investments and end operations in Iran. “These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level.” President Trump tweeted in August. “Anyone doing business with Iran will not be doing business with the United States.”

India, the second biggest oil customer for Iran, is also cutting Iranian imports. Japan and South Korea are expected to halt all oil imports ahead of the November 4 deadline set by the Trump administration. Both India and China are still hoping to secure Obama-era waivers to buy cheap Iranian oil ahead of that deadline.

The sanctions imposed by the Trump administration have triggered an economic crisis in Iran. The country’s currency has lost 140 per cent of its value since June. Things have turned so bad that the regime is resorting to publicly executing currency traders on charges of “disrupting the economy.”

Iran’s deepening economic woes are fueling a fresh wave of popular unrest against the regime. Since January, ten cities — including country’s capital Tehran — have seen large anti-government protests, with demonstrators clashing with the police and calling for an end to the 40-year-old Islamic autocracy.

“Iran’s leaders sought chaos, death and destruction,” Trump at UN general assembly [September 25, 2018]

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