China Defies Trump, Rejects US Request To Halt Iran Crude Imports

Though no shocker as we predicted previously, China has refused to cut Iranian oil imports at the United States' request in a severe blow to White House efforts to intensify pressure and economically isolate the Islamic Republic after the US withdrawal from the 2015 nuclear deal. However, Beijing has reportedly agreed not to accelerate purchases

China, itself a target of ratcheting US economic pressure especially after Wednesday's shock news that President Trump may impose a 25 percent tariff on $200 billion worth of Chinese goods, remains the world's top crude importer and is Iran's top buyer.

Iranian FM Mohammad Javad Zarif and Chinese FM Wang Yi after a bilateral meeting in Beijing, in 2015. Via Reuters

Bloomberg reported overnight, citing two officials familiar with the negotiations, that limited concessions have been made, however:

Beijing has, however, agreed not to ramp up purchases of Iranian crude, according to the officials, who asked not to be identified because discussions with China and other countries continue. That would ease concerns that China would work to undermine U.S. efforts to isolate the Islamic Republic by purchasing excess oil.

China has long been on record as opposing unilateral sanctions and further according to Bloomberg accounted for 35 percent of Iranian exports last month, based on ship tracking data. 

Meanwhile Iran's foreign minister welcomed the news: “The role of China in the implementation of JCPOA, in achieving JCPOA, and now in sustaining JCPOA, will be pivotal,” Mohammad Javad Zarif said, according to Reuters.

The Trump White House currently has teams of negotiators around the world pressuring European and other capitals to cut off trade with Iran — largely unsuccessful to date — in an attempt to cut its oil exports to zero by November 4.

This has been accompanied by the threat of sanctions for those who don't comply with US demands to show "significant" progress in reducing Iranian oil purchases. Bloomberg reports that a US team led by Francis Fannon, the assistant secretary of state for the Bureau of Energy Resources, recently visited China to discuss sanctions, confirmed by a State Department spokesman. 

Crucially, it is as yet unclear how severe a toll this will take on the global oil market, as Bloomberg discusses the variables and unknowns at play:

The oil market has been speculating about how much of Iran’s exports could be eroded by the U.S. sanctions, with analysts from BMI Research to Mizuho Securities predicting that China might boost its imports of cheap supplies from the state and offset cuts by other nations. Countries including South Korea and Japan are reducing purchases from OPEC’s third-largest producer before the deadline to avoid the risk of buyers losing access to the U.S. financial system.

...The Organization of Petroleum Exporting Countries, led by Saudi Arabia, has pledged to fill any supply gaps in the market after Trump’s complaints. That’s helped limit a rally in global benchmark Brent crude, which is trading near $73 a barrel after falling 6.5 percent last month. The London marker is still up about 40 percent from a year earlier.

Saudi Arabia, for geopolitical reasons, remains a close American oil partner in lobbying for global isolation of Iran at a moment when Iran's military has threatened to block all regional exports from the Persian Gulf, initiating war games this week near the vital Straight of Hormuz, prompting the Pentagon to deploy additional US warships to the area

Meanwhile, Commerce Secretary Wilbur Ross told Fox Business Network on Thursday that there's more pain ahead for Beijing while also attempting to calm fears of potential blowback on US consumers and businesses, assuring the public, "It’s not something that’s going to be cataclysmic".

“We have to create a situation where it’s more painful for them to continue their bad practices than it is to reform,” Ross said of ratcheting up the pressure on China and in defense of the president's escalatory rhetoric on tariffs. 

“The reason for the tariffs to begin with was to try and convince the Chinese to modify their behavior. Instead they have been retaliating. So the president now feels that it’s potentially time to put more pressure on, in order to modify their behavior,” he said.

Ross tried to calm fears further by saying Wednesday's announcement of potentially raising planned tariff's on $200 billion of Chinese imports from 10 percent to 25 percent would only amount to $50 billion — according to him a negligible fraction of the Chinese economy.

But the Chinese aren't seeing it that way, as on Thursday Chinese Foreign Minister Wang Yi slammed talk of possible 25 percent tariffs: "Instead of achieving one's own goal by doing this, we believe it will only hurt one's own interests," he told reporters at a press conference in Singapore. He continued, "Sixty per cent of Chinese exports to the US are actually made by foreign companies, including American firms in China. Is the US trying to put tariffs on its own companies?"

"For Chinese exports to the US, many of them are no longer produced in the US itself. Is the US administration trying to raise the living cost of its own consumers?" the Chinese FM said.

FM Wan Yi called for cooler heads to prevail: "While China is ready to talk to anyone ready to talk to us, including the US, this kind of dialogue has to take place on the basis of mutual respect and equality," he concluded.

* * *

While as much as 2.3 million barrels a day of crude from the Persian Gulf state at risk per Trump's sanctions, the White House has has now as predicted gotten the door slammed by China, while India or Turkey have already hinted they would defy Trump and keep importing Iranian oil. Together three three nations make up about 60 percent of the Persian Gulf state’s exports.

While next steps remain unclear, the potential outcome for the US isn't: should China fully pivot away from US exports and replace them with Iranian product, the US trade deficit will resume rising, further adding to the pressure of what is Trump's biggest economic hurdle: the double US deficits.

The flipside is that since less Iranian oil exports will go unused, it may provide a solace to the US consumer facing the highest gas prices in four years. However, if the ongoing pipeline bottleneck in the Permian is not resolved soon, said solace will prove to be short-lived.



holdbuysell Fri, 08/03/2018 - 20:47 Permalink

Uh oh, now you made the declining empire really mad and will need to endure the stomping of feet and reddening of faces of corrupt politicians.

In other news, no one cares...

lock-stick BarkingCat Sat, 08/04/2018 - 00:44 Permalink

ONE whackjob obsessed SPAMMER!!!

•• More Sun (it's the JOOS!!

•• sanctificado  (Biblicism SPAMMER -- banned as powow/Wadolt/ravolla/lloll/pier/etc.)

•• Free This  (same WHACK JOB -- used to be "Mr Hankey" -- also banned)

•• Cryptopithicus Homme  (another "imaginary friend")


spamming ZH for seven years --- dozens and dozens of banned log-ons




Write to the Tylers ::

In reply to by BarkingCat

LetThemEatRand Stan522 Fri, 08/03/2018 - 20:58 Permalink

"What happens if one of these tankers hits a under water mine?"

War.  But why do we need to start a war?  China is not going to bomb us if we impose real tariffs.  War is not even remotely necessary to address the problem.  Sacrifice at home while we readjust the manufacturing economy and give up cheap shit, yes.  War, no.  But my guess is most Americans would rather have war.

In reply to by Stan522

CashMcCall LetThemEatRand Fri, 08/03/2018 - 22:13 Permalink

Another fucking Socialist with the Marxist mantra of sacrifice for the venerable US laborer. The reason you have no companies in the USA is UNIONS! No companies are coming back to the litigious, taxing, meddling EPA OSHA nightmare of Merica. Then you have fucking Obamacare the largest tax in US history on businesses. Are you out of your mind? Then you have the highest worker disability that is scammers, then the highest absenteeism in the world... "Sick child." LOL. You have the highest level of employee theft and employee drug an alcohol abuse. It ain't happening stupid. 

In reply to by LetThemEatRand

CatInTheHat CashMcCall Fri, 08/03/2018 - 23:00 Permalink


BOTH parties just voted to give Trump one TRILLION to the Pentagram washing machine & 38 BILLION to the Zionist welfare state. WAR and the largest transfer of wealth with Obama's bailout of the banks, 8 years of QE, Bill Clinton's offshoring of good paying jobs to CHINA & Mexico and Trump's tax heist has BLED the American taxpayer dry, the latter resulting in a reduction of REVENUE, hence call up the tariffs = tax upon the American people.

It isn't those at the bottom of the economic ladder responsible for the heist of American blood & treasure. 

In reply to by CashMcCall

garcam123 CatInTheHat Sat, 08/04/2018 - 10:54 Permalink

Patriot Americans need to arrest, try, convict and execute the organized criminal enterprise referred to as the US Government by it's controlled and directed, duplicitous, pus-filled rectum referred to as the media.

The world is reaching a state of madness that is largely precipitated by this cabal of murder, money and control.

In my view the start of the arrest of the crime gang will be the first outbreaks of citizens rising up and demanding arrests.

"law enforcement" is the hit team of these criminals so they are only going to assault YOU when YOU complain.  They have room for you downtown.  But somewhere, a group is going to stand, and probably die, but it will be the spark.......and then things will get real bad.  All of the militaristic cop shit will be open and in your face. AFD

Who was it that said that if we don't hang together, we will surely hang alone!?

Bunch of you guys are gonna get called back for Iran when they false flag a tanker over there, AFD....any fuckin day.......bye!

I'm an old guy now I wish I knew something to do to help! I'm looking forward to finally being dead! I feel sorry for young people.

They are not going to understand what is going to happen to them.....staring at their iphones.


In reply to by CatInTheHat

SybilDefense beemasters Sat, 08/04/2018 - 11:33 Permalink

I for one would like some sort of tax rebate or effective cheapening of my 'be american dues'.  At least transparency of where the tariff monies go.  Sanctions, tariffs, etc never seem to filter down to my own personal accounts.  Nor do they seem to be useful in slowing the nations debt ticker.

With all of the uber intelligencia employed by our gov, one would think that  they'd have the brain power to economize their own labor force and strive for efficiency in gov HR.  But as in the markets... Its opposite-ville where one begats two, begats four ad nauseum until 100's of employees do the one guys job. With the internet and a smart guy or two, the peoples voice could simply an effective become the peoples government, as intended by the framers.  But then of course no pilferage could occur should the entire MIC be comprized of generals Mike, Joe and Pete, working of the data submitted by the people.  Why the hell did everyone get Obama phones if you can't even use it for one measily  vote on your state reps black box poll server.

In reply to by beemasters

chippers Fri, 08/03/2018 - 20:48 Permalink

This is Trumpsteins idea of negotiating first you insult and attack your counterparty,  then you ask them to do you a favor.  Not sure why its not working this time,  maybe he has to turn up the bluster to 11.

anti-cen Fri, 08/03/2018 - 21:07 Permalink

Hay Trump just so you know you can also stick your oil embargo up your arse if you think that "We the people" in Europe will pay higher gas prices just because you say so.

We are all but ready to turn on our leaders, yanks are you with us or did you forget who bailed Trump out when he was worth nothing and his daughter happens to marry one of them and what about the open investigation into the events of 9-11 or do you all have the brains of a golf fish.

Russia is a fake enemy that keeps the cold war fires burning (by design) and China is not the enemy so who does that leave but if yanks have not worked it out by now then tell me who profits from these trade sanctions because it's certainly not you or the muzzles that they blame it all on is it now. 

JSBach1 anti-cen Fri, 08/03/2018 - 21:29 Permalink

A global realignment is certainly long overdue. The unprecedented level of corruption, tyranny, and hubris on display is simply astonishing. 

It almost seems like a simple spark in Europe or US could ignite a raging firestorm which could potentially engulf this evil cesspool of governance. I would not like to be in a position of power in these areas as it has a real potential of encompassing the regions much like a raging wildfire.

People need to realize no one will save them except themselves from these corrupt government criminal gangs. These are certainly interesting times we live in.

In reply to by anti-cen