The United State has imposed sanctions on a leading Chinese state-owned company for importing Iranian oil. The sanctions placed by the U.S. State Department bar Zhuhai Zhenrong Corporation, one of China’s largest state-run oil companies, from “engaging in foreign exchange, banking or property transactions under US jurisdiction,” London-based Financial Times reported.
“As part of that maximum pressure campaign, I am announcing that the United States is imposing sanctions on the Chinese entity Zhuhai Zhenrong and its chief executive Youmin Li,” Secretary of State Pompeo told reporters on Tuesday.
While the U.S. sanctions have deterred almost all foreign buyers in Europe and Asia from trading in Iranian oil, China remains Tehran’s top trading partner and its biggest oil customer. Chinese drilling companies are willing to invest billions in Iranian oil sector. Earlier this year, China’s state-owned energy firm Sinopec offered $3 billion to develop oil fields in the country.
China is hoarding cheap Iranian oil in violation of the sanctions. “Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer,” the Bloomberg confirmed.
The Reuters reported the details of the U.S. measures against Chinese state-owned company:
The United States has sanctioned Chinese state-run energy company Zhuhai Zhenrong Co Ltd for allegedly violating restrictions imposed on Iran’s oil sector, U.S. Secretary of State Mike Pompeo said in a speech on Monday.“We’ve said that we will sanction any sanctionable behavior, and we mean it,” Pompeo said in a speech in Florida in which he announced the move.It comes amid increased tensions between Iran and the West as well as between the United States and China, which have been engaged in a major trade war.U.S. President Donald Trump’s administration has stepped up its sanctions against Iran after breaking from a nuclear pact brokered between Tehran and other Western nations under the previous administration of President Barack Obama.In a later statement, Pompeo said Zhuhai Zhenrong “knowingly engaged in a significant transaction for the purchase or acquisition of crude oil from Iran” after the expiration of a U.S. sanctions waiver covering China on May 2.
India, Tehran’s second-largest buyer after China, ended Iranian oil imports in May. Prime Minister Narendra Modi’s government has refused to resume energy imports from Iran in the ‘near future.’ South Korea and Japan, other major Asian buyers of Iranian oil, have taken similar steps.
In the wake of U.S. sanctions, European countries, too, have halted their oil imports. The European Union, however, has launched a payment mechanism to enable Iranian oil imports to resume. The EU-backed payment system aims to conceal the incriminating money trail, thereby shielding European companies and banking institutions from secondary sanctions under the U.S. law. The success of the newly-launched Franco-German payment mechanism is yet to be ascertained.
The Trump administration has responded to the EU and Chinese measures by called for a global coalition to isolate the Iranian regime. The U.S. is working to build an alliance comprising of European, Asian, Middle Eastern countries to “push back against the world’s largest state sponsor of terror,” Secretary of State Pompeo said recently.
With its own oil exports collapsing, regime’s key source of revenue, Iran has been attacking foreign crude shipments in Persian Gulf waters. By continuing to buy Iranian oil, China is directly financing Tehran’s state-sponsored terrorism and its military adventure on the high seas.
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