Shortly after the Trump administration reimposed sweeping sanctions on the Islamic Republic of Iran, Secretary of State Mike Pompeo made an important announcement. It was a calculated move to avoid a major embarrassment. The hawks in the power corridors of Washington had anticipated the backlash of sanctions on US foreign policy with many global powers rebuffing Trump’s foolhardy move.
Pompeo said eight countries would be exempted from the draconian sanctions on buying Iranian crude oil due to special circumstances. The countries included China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey.
Many of these countries had quite clearly indicated that they would not be cutting oil imports from Iran under the US pressure, most importantly China, Turkey, and India – three of Iran’s largest oil customers.
While India has its own strategic interests in maintaining good relations with Tehran, for instance, the Chabahar port project in Sistan-Baluchistan, Turkey’s relations with Washington have hit a new low following sanctions and trade tariffs imposed by the US.
China, which has emerged as a viable counterweight to US hegemony in the world and a protagonist of new international economic policy, has unambiguously reaffirmed its commitment to keep alive the Iran nuclear deal and stand by the Islamic Republic of Iran.
On November 5, when the petroleum-related sanctions came into effect, Chinese foreign ministry said it will continue to “hold a fair, objective and responsible attitude” and “resolutely safeguard its legitimate rights”, while reiterating its opposition to the unilateral US sanctions.
“China feels sorry for the US' decision and we noticed that the international world as a whole opposes the practice of such unilateral sanctions,” foreign ministry spokesperson Hua Chunying said at a press briefing.
She said Iran has been seriously fulfilling its obligations under the JCPOA and its efforts have been recognized by the International Atomic Energy Agency dozen times. She also affirmed that China will firmly safeguard its lawful rights while continuing to adhere to JCPOA and urged relevant parties to stand on the “right side of history”.
China has maintained that implementing the Iranian nuclear deal is akin to safeguarding the authority of UN Security Council, basic norms of international law, international non-proliferation treaty and peace and stability in the Middle East.
As one of the remaining signatories of the JCPOA, along with European Union countries who are exploring options to circumvent the US sanctions, Beijing wants to keep the deal alive. China, believe experts, is in a better position compared to other Asian countries as it is not subservient to US interests and is already embroiled in a bitter trade war with Washington.
For all parties of the JCPOA, Iranian crude oil is the main commodity of interest, particularly for Beijing. In 2017, one-third of Iran’s oil was supplied to China, which underlines the significance of oil trade between the two countries. China’s commitment to continue importing oil from Iran is very likely to deal a body blow to US ploy of reducing Iranian oil imports to zero and ‘starving’ the Iranian nation.
Hu Xijin, chief editor of the influential Chinese daily Global Times, told Tehran Times that there was no possibility of Washington reducing the Iranian oil exports to zero, “because Washington lacks righteousness to do so, therefore it can’t have the full support of the international community”.
To continue oil trade in different currencies other than dollar, Iran has been in talks with key allies, including China. On September 29, Foreign Minister Javad Zarif said Tehran would circumvent sanctions by conducting trade in all currencies to avoid using the US dollar. “You can use your own currency. Sell stuff in your own currency, buy stuff in the other country’s currency, and at the end of a specific period, balance it out in a non-dollar currency. It’s quite possible and may even be profitable,”
China, which is the largest oil importer in the world with around nine million barrels imports every day, has been making concerted efforts to reshape the global oil market with increased usage of its currency in oil trading. If Chinese currency manages to replace the US dollar, it will be a masterstroke.
US has been rendered friendless and isolated in its quest to tear up the Iran deal and force countries to cut oil imports from Iran. European Union has already refused to back down on the Iran deal, exploring ways to develop payment channels to facilitate payments related to Iran’s exports. The goal, according to a statement issued by EU, “is to protect the freedom of other economic operators to pursue legitimate business with Iran”.
Beijing has expressed its full support to the EU's proposal to set up a "special payments system" to facilitate trade with Iran and safeguard the Iranian nuclear deal, which experts believe will significantly reduce reliance on the US dollar in the global oil trade. That will be a game-changer.
Your Comment