China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program.
As European Union members negotiate an Iranian oil embargo and the U.S. begins work on imposing sanctions to complicate global payments for Iranian oil, Chinese refiners already may be taking advantage of the mounting pressure. China is demanding discounts and better terms on Iranian crude, oil analysts and sanctions advocates said in interviews.
“The sanctions against Iran strengthen the Chinese hand at the negotiating table,” Michael Wittner, head of oil-market research for Societe Generale SA in New York, said in a phone interview. While there are no confirmed numbers, Chinese refiners are likely to win discounts on Iranian crude contracts as buyers from other nations halt or reduce their purchases of Iranian oil to avoid being penalized under U.S. and European sanctions, he said.
Biggest Refiner
China is the biggest refiner of Iranian crude, buying 22 percent of Iran’s oil exports, according to the U.S. Energy Information Administration.
“Iran is one of China’s biggest petroleum suppliers,” Zhai said at a Jan. 11 briefing in Beijing. “China hopes that petroleum imports won’t be affected, as petroleum is needed for China’s development and for ensuring the needs of its people.”
The U.S. today announced sanctions against China’s Zhuhai Zhenrong Company, the country’s largest supplier of refined petroleum to Iran. The U.S. has determined that Zhenrong brokered delivery of $500 million of gasoline to Iran between July 2010 and July 2011, the U.S. State Department said in a statement. Energy trading firms Kuo Oil Pte. Ltd., of Singapore and FAL Oil Company Ltd of United Arab Emirates also were sanctioned, according to the statement.
