China buys more Iranian and Venezuelan oil in a test for Biden

This trend is confirmed by other shipping trackers, some of which record these sales at 1 million barrels per day.

“If it sells 1 million barrels a day at current prices, Iran has no incentive to negotiate,” said Sara Vakhshouri, president of SVB Energy International in Washington and an expert on Iran’s oil industry.

President Biden’s administration has tried to engage with Iran to return to a 2015 nuclear deal that was concluded by his predecessor, former President Donald Trump. But Tehran has so far rejected overtures.

China’s oil purchases from Venezuela, where the US has tried to impose sanctions to pressure the Maduro regime to hold credible democratic elections, are also on the rise, according to London-based financial data provider Refinitiv.

Rising oil shipments to China, Iranian and Venezuelan officials said, followed Mr Biden’s offer of assistance to Iran in exchange for the country’s compliance with an international nuclear deal and with Venezuela in holding free elections. Mr. Trump has pursued a policy of escalating sanctions on both countries.

China is also increasingly violating international sanctions on North Korea and is no longer trying to hide some of its smuggling activity as it tries to help Pyongyang, US officials said recently.

Combined with rising oil prices, developments have eased pressure for Tehran and Caracas to negotiate with Washington, the people said.

“Chinese informal acquisitions have reduced the need to negotiate oil sanctions” for Tehran, a US-centered Iranian official said.

The State Department, when asked about the effects of Chinese imports of Iranian crude oil on efforts to re-engage Tehran, did not respond to a request for comment. State Department spokesman Ned Price rejected the idea that the Biden administration would ease sanctions without Tehran’s action to reduce violations of the nuclear deal, known as the Comprehensive Joint Action Plan or JCPOA.

“If the Iranians feel that there is no movement on their part to resume full compliance with the JCPOA that we will offer unilateral favors or gestures, this is a non-impression,” Mr Price told reporters earlier this week.

Since November, Iranian oil traders say they have been approached for new sales by Asian buyers who want to take advantage of the reduced prices, as buyers believe sanctions will be eased under the Biden administration.

Iranian officials and traders have become increasingly adept at circumventing sanctions, making undercover transfers to the Persian Gulf and South Asia to hide the origin of their cargo and find new ways to get paid using non-banking platforms, such as be cryptocurrencies.

On Monday, Iranian Vice President Eshaq Jahangiri said Iranian oil exports had risen in recent months, although he did not give details.

“There were some problems with the money transfers. So we had to come up with certain plans, methods of bringing in oil export revenues and we recently had a breakthrough, ”Mr. Jahangiri was quoted as saying by the IRNA news agency.

Kpler analyst Homayoun Falakshahi said tracking ships has shown that the fastest-growing buyer is administered by China Petroleum & Chemical. Body.

, or Sinopec, the largest refinery in the country. After cutting staff and spending over the past two years, Sinopec is posting new job offers online and discussing with the government about doubling its production in the country, according to former Iranian oil officials and the company’s adviser.

Officials from Sinopec and the Chinese embassy in Washington did not return requests for comment. Chinese officials have long criticized US policy in Iran and Venezuela, as well as its financial diplomacy, as unilateral and coercive.

Washington still hopes to lure the Islamic Republic with more substantial relief that will come with the release of billions of dollars in frozen oil money and a return to official crude oil sales. Instead, the United States wants Iran to abide by the nuclear deal despite repeated violations and wants to tighten controls on Tehran’s ballistic program and other efforts that were not covered by the original nuclear deal.

Meanwhile, Iran has helped Venezuela supply oil products, sell diesel and other critical energy needs in exchange for Venezuelan oil and gold. The oil is then sold on global markets, generating revenue for Iran and politically strengthening Mr Maduro.

For the US-China relationship, already strained by a series of security and economic disputes, Beijing’s gross trade with two of Washington’s main enemies adds another major irritant.

“This is a complex relationship and perhaps the most consistent relationship for both of our countries and it has conflicting aspects, it has competitive aspects and it has cooperation aspects,” Secretary of State Antony Blinken said earlier this week.

US officials have reminded China that companies that help import oil from Iran risk being sanctioned and say Beijing could be punished for its Venezuelan trade. The State Department declined to comment on its communications with China.

“The Maduro regime has adapted to oil sanctions, finding a way around them to deliver oil to China and Russia, and Iran has helped them,” a senior administration official said. “So we will use our sanctioning tools to make sure we eliminate these options,” for the Maduro government, the official said.

However, others say the administration will take care to balance such policies with American economic interests. “In some cases, I did not sanction [China] because of the impact on our economy. If we hit hard, they could retaliate, “said another US official.

Biden administration officials are meeting with Chinese counterparts for the first time this week in Alaska.

Write to Benoit Faucon at [email protected] and Ian Talley at [email protected]