fully loaded Chinese oil tanker ploughing its way eastwards from two Iranian oil terminals raises questions of how far
Beijing is willing to go in defying US sanctions amid a mounting US military build-up in the Gulf and a US-China trade war.
sailing from Iran of the Pacific Bravo takes on
added significance with US strategy likely to remain focused on economic
rather than military strangulation of the Iranian leadership, despite
to the Gulf of an aircraft carrier strike group as well as B-52 bombers
and a Patriot surface-to-air missile system.
As President Donald J. Trump, backed by Secretary of State Mike
Pompeo, appears to be
signalling that he is not seeking military confrontation, his administration is
reportedly considering a third round of sanctions that would focus on Iran’s
petrochemical industry. The administration earlier this month sanctioned the country’s metals and minerals trade.
The sailing raises the question whether China is
reversing its policy that led in the last quarter of 2018 to it dramatically reducing its trade with Iran, possibly in response to a recent breakdown in US-Chinese trade
question is whether non-oil trade remains
depressed even if some oil sales resume, which I think it will. That’s
the better indicator of where Chinese risk appetite has changed.
Iran’s reprieve will be limited—but
better than zero perhaps,” tweeted Esfandyar Batmanghelidj, head of
Bourse & Bazaar, a self-described media and business diplomacy
and the founder of the Europe-Iran Forum.
A Chinese analyst interviewed by Al Jazeera argued
that “China is not in a position to have Iran’s back… For China, its best to stay out” of the fray.
The stakes for China go beyond the troubled trade
talks. In Canada, a senior executive of controversial Chinese telecommunications giant Huawei is fighting extradition to the United States on charges of violating US
sanctions against Iran.
Reports that Western companies, including Kraft Heinz,
Adidas and Gap, wittingly or unwittingly, were employing Turkic
Muslims detained in re-education camps in China’s north-western province of Xinjiang, as part of opaque supply chains, could
increase attention on a brutal crackdown that China is struggling to keep out of the limelight.
The Trump administration has repeatedly criticized the
crackdown but has stopped short of sanctioning officials involved in the repressive measures.
Bourse & Bazaar’s disclosure of the sailing of the
Pacific Bravo coincided with analysis showing that Iran
was not among China’s top three investment targets in the Middle East even if Chinese investment in the region was on the
The Pacific Bravo was steaming with its cargo
officially toward Indonesia as Iranian foreign minister Mohammad Javad Zarif was touring his
country’s major oil clients, including China, in a bid to persuade them to ignore US sanctions.
A second tanker, the Marshal Z, was reported to
unloaded 130,000 tonnes of Iranian fuel oil into storage tanks near the Chinese city of Zhoushan.
Marshall Z was one of four ships that, according
to Reuters, allegedly helped Iran circumvent sanctions by using
ship-to-ship transfers in January and forged documents that masked the
cargoes as originating
The unloading put an end to a four-month odyssey at
sea sparked by buyers’ reticence to touch a cargo that would put them in the US crosshairs.
in China decided that the steep discount
this cargo most likely availed … was a bargain too good to miss,” Matt
Stanley, an oil broker at StarFuels in Dubai, told Reuters.
The Pacific Bravo, the first vessel to load Iranian
oil since the Trump administration recently refused to extend sanction exemptions to eight countries, including China, was recently acquired by China’s Bank of Kunlun.
The acquisition and sailing suggested that Bank of
Kunlun was reversing its decision last December to restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.
bank was the vehicle China used in the past for
business with Iran because it had no exposure to the United States and
as a result was not vulnerable to US sanctions that were in place prior
to the 2015
international agreement that curbed Iran’s nuclear program.
willingness to ignore, at least to some
extent, US sanctions could also constitute an effort to persuade Iran to
remain fully committed to the nuclear accord which it has so far upheld
year’s US withdrawal.
Iran recently warned Europe that it
would reduce its compliance if Europe, which has struggled to create a credible vehicle that would allow non-US companies to
circumvent the sanctions, failed to throw the Islamic republic an economic lifeline.
In a letter that was also sent to Russia and China,
Iran said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and
could stop observing limits on uranium enrichment at a later stage.
president Vladimir Putin warned in response to
the Iranian threat that “as soon as Iran takes its first reciprocal
steps and says that it is leaving, everyone will forget by tomorrow that
the US was the
initiator of this collapse. Iran will be held responsible, and the global public opinion will be intentionally changed in this