Senior administration officials now agree that China defied U.S. sanctions when it imported more than a million barrels of crude oil from Iran last month. But they are grappling with whether — and how — to hit back, according to three U.S. officials.
The State Department had considered issuing a waiver allowing Chinese companies to receive Iranian oil as payment in kind for their investment in an Iranian oil field, but that idea has been abandoned. China hawks on the National Security Council are now pushing for the U.S. to impose secondary sanctions on Chinese entities, a move that would complicate trade talks between the two countries and further strain the relationship.
The Trump administration has been pushing to reduce Iran’s oil exports to zero as part of its policy of “maximum pressure” on Tehran amid the worsening standoff over Iran’s nuclear program. It has had some success in persuading [“persuading”??] several of Iran’s largest consumers — India, Japan, South Korea and Turkey — to curb their purchases.
But Beijing is a tougher customer. In June, a tanker carrying up to a million barrels of Iranian oil docked near the Chinese port city of Qingdao, drawing complaints from Republican lawmakers, who demanded the Trump administration pressure China to stop. China has also reportedly welcomed a second batch of Iranian oil since its previous waiver expired in May — this one a 2-million barrel shipment that docked in Tianjin. [Also gas.]
China’s continuing defiance would seem to undercut the Trump administration’s claim that its efforts to squeeze Iran are working. In a recent speech, national security adviser John Bolton announced that “all significant reduction exceptions on Iranian oil sales have gone to zero.”