June 13, 2012 | Quote
China’s Imports of Iranian Crude ‘Legal and Reasonable’ -Foreign Ministry
BEIJING–China's foreign ministry said Tuesday that the country's imports of Iranian crude oil were “entirely legal and reasonable” and that its position on the matter has been made clear to the U.S.
Speaking at a regular press briefing, spokesman Liu Weimin reiterated that the imports were fair and transparent and not in violation of U.N. Security Council resolutions.
The imports don't “harm the interests of other countries or the international community,” Mr. Liu said. “We don't accept the unilateral imposition of sanctions on a third-party state.”
The Obama administration Monday granted exemptions to seven more countries from looming U.S. sanctions that would target financial institutions doing business with Iran. The U.S. is still in talks with China, whose crude imports from Iran fell by 31% in the January-April period.
Iran was China's third-largest supplier in 2011, accounting for about 557,000 barrels a day. And China is its top customer, accounting for 22% in the first half of 2011, according to the U.S. Energy Information Administration.
Although China was left off the list, the White House may grant it an exemption from sanctions if Beijing can provide assurances that it won't increase crude imports from Iran or show that it bought the crude at a discount, Mark Dubowitz, executive director at the Foundation for Defense of Democracies, a Washington think tank, said. The group has been pushing for more sanctions on Iran.
The assurances stop short of a Chinese commitment to reduce Iranian imports, but they could provide enough political cover for the U.S. to claim victory in reducing Iran's oil revenues and allow China to maintain crude imports from a key supplier, he said.
“The U.S. is in tough negotiations with the Chinese to find the right mix of volume reduction and price discounts to justify a waiver,” Mr. Dubowitz said.
Washington isn't entirely convinced that Chinese cuts earlier this year will be sustained, as the decline was attributed to a commercial dispute between China International United Petroleum and Chemical Co., or Unipec, and National Iranian Oil Co.
The dispute was resolved in mid-February and imports from Iran began rebounding in April. All eyes will be on Chinese May import data, due later this month, which may show shipments returning to earlier levels.
China can afford not to increase imports of Iranian crude this year due to a slowing domestic economy, Michal Meidan, an analyst at political risk consultancy Eurasia Group, said.
However, its reasons for holding imports at current levels wouldn't be due to U.S. pressure or to pressure Iran over its nuclear activities, Ms. Meidan said.
“I don't think the Chinese would shy away from increasing Iranian imports in 2013 or if considerable discounts are on the table.”