Trump’s Statement on China’s Oil Purchases from Iran
Oil prices dropped about 6% on Tuesday. This happened after Trump’s comments about China and the ceasefire.
President Donald Trump said on Tuesday that China can buy oil from Iran. This comes after a ceasefire deal between Israel and Iran. But the White House later said this does not mean a change in US sanctions.
Trump posted on Truth Social, “China can now continue to purchase oil from Iran. Hopefully, they will be purchasing plenty from the US, also,” just after allowing US strikes on three Iranian nuclear sites.
A senior White House official told Reuters that Trump’s statement was about Iran’s decision. Iran decided not to block the Strait of Hormuz to oil ships. This blockade would have hurt China, the biggest buyer of Iranian oil.
The official said, “The president continues to call on China and all countries to import our state-of-the-art oil rather than import Iranian oil in violation of US sanctions.”
Oil prices dropped about 6% on Tuesday. This was due to Trump’s remarks about China and the ceasefire.
US Sanctions on Iran
A possible easing of sanctions on Iran would be a change from the past. Trump had said in February that he would keep maximum pressure on Iran. This pressure is on its oil exports because of concerns over its nuclear program and support for regional militants.
Trump had put many sanctions on Chinese independent refineries and port operators. These sanctions were because they bought Iranian oil.
“President Trump’s greenlight for China to keep buying Iranian oil reflects a return to lax enforcement standards,” said Scott Modell. He is a former CIA officer and now CEO of Rapidan Energy Group, according to the Reuters report.
Beyond non-enforcement, the president has the power to suspend or waive sanctions through executive orders or congressional legislation.
According to Modell, Trump is unlikely to waive sanctions before upcoming US-Iran nuclear talks. These measures give a strategic advantage considering Tehran’s need for permanent sanctions relief.
Jeremy Paner from Hughes Hubbard & Reed law firm said that a presidential decision to suspend Iran-related oil sanctions would need a lot of inter-agency coordination.
The United States Treasury would need authorization permits. The State Department must provide waivers that need notification to Congress.
China to Buy More US Oil?
Market experts and oil analysts in Asia said that Trump’s statements are unlikely to change China’s immediate oil buying patterns, whether from Iran or the United States.
- Iranian crude makes up about 13.6% of China’s oil buys this year.
- The low-cost supplies are crucial for independent refineries with tight margins.
- American oil is only 2% of Chinese imports.
- Beijing’s 10% duties on US oil discourage more purchases.
China often challenges what it calls Washington’s “abuse of illegal unilateral sanctions.”
When asked about Trump’s statement at a press conference, Chinese foreign ministry spokesperson Guo Jiakun said that China would take appropriate energy security measures in line with its national interests.
Potential Tensions with Saudi Arabia
More Iranian oil buys by China and other countries could cause tension with Saudi Arabia, the world’s top oil exporter.
The effect of US sanctions on Iranian exports has been limited since the first strict measures during Trump’s previous term.
This year, Trump has put sanctions on Chinese trading firms and terminals, but the results have been less impactful than intended, according to Modell’s assessment.
In response to media questions, State Department spokesperson Tammy Bruce said that Trump had stated his goals and the administration is working to achieve them. She did not give details on specific steps.
“But clearly we are focused on making sure that (the) guiding hand of President Trump prevails and moves this government forward, so we will have to wait and see when it comes to what that ends up looking like,” Bruce said.
