One of China’s largest independent oil refineries will switch from U.S. oil to Iranian crude amid continuing fallout from the escalating trade war between Washington and Beijing.
Experts also noted the move comes despite efforts by the Trump administration to stop other countries from purchasing Iranian crude and cripple Tehran’s oil industry. President Trump has pursued that policy since withdrawing the U.S. from the 2015 Iranian nuclear deal in May.
China’s ShanDong Dongming Petrochemical Group announced the news via its website on Monday but gave no further details.
China is the world’s top crude oil buyer.
Since Congress repealed a 40-year ban in late 2015, U.S. oil exports have more than quadrupled, with China becoming the second-largest buyer of U.S. crude last year, according to market data.
In the escalating trade war between the two countries, earlier this month Washington and Beijing slapped $34 billion of import tariffs on each other’s products. While neither Chinese crude imports to the U.S. — nor U.S. imports to China — have been subjected to respective tariffs, experts in both countries warn oil could easily be targeted with future tariffs by both countries.
ShanDong Dongming’s decisions to switch to Iranian crude was apparently taken as a preemptive measure.
“We expect the Chinese government to impose tariffs on (U.S.) crude,” an executive at the company told Reuters last week. “We will switch to either Middle East or West African supplies.”
Chinese leaders have reacted defiantly to Washington’s effort to push Iranian oil exports sales to zero by November. To do that, U.S. officials have threatened to impose harsh economic sanctions on countries still buying Tehran’s oil past that date.
In the first quarter of this year, according to official Chinese customs data, China’s average daily imports from Iran were roughly 655,000 barrels a day — more than a quarter of Iran’s total exports.
In recent weeks, leading U.S. officials have publicly discuss the possibility of offering waivers to countries unable to wind down all their Iranian imports before the November deadline.
“We want people to reduce oil purchases to zero, but in certain cases if people can’t do that overnight, we’ll consider exemptions,” U.S. Treasury Secretary Steven Mnuchin said in remarks released on Monday. Secretary of State Mike Pompeo made a similar remark to journalists last week.
Japan and India have both expressed frustration by the deadline, saying it will hurt their economies if they meet it.
• Dan Boylan can be reached at dboylan@washingtontimes.com.
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