Is China A Lifeline For Iran And Its Oil Exports?

Updated on

There were few signs that US Treasury Secretary Timothy Geithner had any success during his visit to Beijing this month to persuade China to help pressure Tehran over its nuclear program by buying less Iranian oil.

“China’s regular demand for energy has nothing to do with the nuclear issue and it should not be affected,” Foreign Ministry spokesman Liu Weimin said Jan. 11, after Mr. Geithner met with top Chinese leaders.

China is Iran’s largest oil and gas client, and Beijing has consistently played down economic sanctions as an effective way to influence Tehran, or any other government.

How much do you know about China? Take our quiz.

“Few issues can be solved by sanctions,” says Tao Wenzhao, a foreign-affairs analyst at the government-sponsored China Academy of Social Sciences. “We think that the correct way to resolve international issues is through negotiations.”

But while Beijing’s reluctance to go along with United States sanctions came as little surprise, at the same time there seemed equally little chance that China would increase its Iranian oil intake to help Tehran if other countries cut back their purchases.

The European Union has agreed in principle to an oil embargo, and US allies such as South Koreaand Japan, two other major importers of Iranian oil, could also join America in pressuring Tehran.

“China will not go all the way” to support Iran, says Willem van Kemenade, a Beijing-based expert on Sino-Iranian relations. “They are not going to confront the US in a decisive way.”

Oil traders here say Beijing, which last year bought 11 percent of its oil imports from Iran, cut back on purchases this month. But this appears to be a result of a dispute over price and credit terms, as China seeks to profit from Iran’s straitened circumstances by bargaining for a better deal.

Read More:

ValueWalk Premium Subscription Includes:
  • 3 Write-ups per month (EXCLUSIVE content that you won’t find anywhere else)
  • Personal Track Record from Jacob’s Brokerage
  • Any question you have answered within 48 hours
Is China A Lifeline For Iran And Its Oil Exports?

Leave a Comment