Sunday, May 24, 2020

Chinas's manoevering between iranian oil imports ans US sanctions

China has to tack between the need for crude and impeding US sanctions, The Diplomat:

"Chinese tankers are reported to have turned off their transponders, automatic identification systems, prompting warnings from U.S. officials. And reports surfaced not long after the sanctions waivers terminated that Iranian tankers were supplying China, sometimes also switching off their transponders. They are believed to engage in the practice while allegedly conducting ship-to-ship  (STS) transfers to China-bound vessels off the Malaysian coastBloomberg research revealed that STS deliveries had risen sharply in September, three times more than the previous month. Although the provenance of the oil was said to be unclear, the agency quoted an analyst suggesting it could be Iran or Venezuela.  
The scale of Beijing’s alleged clandestine supplies has yet to be determined, but given the reported marked increase in volume of disguised cargoes last year it might be receiving more than its declared imports. The U.S. has sought to deter China’s suspected sanctions evasion by targeting non-compliant companies and their officials. There have been a flurry of penalties since the American waivers ended. In September, two oil tanker subsidiaries of COSCO, a major Chinese shipping and logistics company, were blacklisted, and the action reportedly sent world freight costs to record highs and disrupted the global shipping market.  
The sanctioning of the shippers threatened to complicate U.S.-China trade negotiations. A “Phase One” deal was eventually achieved in January, and on the eve of the agreement it was reported that US officials were working behind the scenes with independent Chinese refiners to prevent purchases of Iranian crude. Just days after the breakthrough in the trade talks, Washington lifted sanctions against one of the COSCO subsidiaries. 
The aim of the move appears to have been twofold: easing the impact of the original black-listings; and retaining leverage over China’s oil trade with Iran. A senior Chinese official reportedly complained about the sanctioning of the COSCO units in the trade talks which, coupled with the steep drop in official Chinese imports of Iranian crude, suggests American penalties have real deterrence value, even if some degree of sanctions evasion continues."

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