*BEIJING – China gives Iran a lifeline as European companies such asFrance’s Total are walking away due to fear of reprisals from Washington.*
The United States is trying to halt Iranian oil exports in an effort toforce Tehran to negotiate a new nuclear agreement and to curb its influencein the Middle East.
China, which has cut imports of U.S. crude amid a trade war withWashington, has said it opposes unilateral sanctions and defended itscommercial ties with Iran.
On Monday, sources told Reuters Chinese buyers of Iranian oil werebeginning to shift their cargoes to vessels owned by National IranianTanker Co (NITC) for nearly all their imports.
The shift demonstrates that China, Iran’s biggest oil customer, wants tokeep buying Iranian crude despite the sanctions, which were reimposed afterthe United States withdrew in May from a 2015 agreement to halt Iran’snuclear program.
“The shift started very recently, and it was almost a simultaneous callfrom both sides,” said one source, a senior Beijing-based oil executive,who asked not to be identified as he is not allowed to speak publicly aboutcommercial deals.
Tehran used a similar system between 2012 and 2016 to circumventWestern-led sanctions, which had curtailed exports by making it virtuallyimpossible to obtain shipping insurance for business with Iran.
Iran, OPEC’s third-largest oil producer, relies on sales of crude to China,Japan, South Korea, India and the EU to generate the lion’s share of budgetrevenues and keep its economy afloat.
The United States has asked buyers of Iranian oil to cut imports fromNovember. Japan, South Korea, India and most European countries havealready slashed operations.
French oil major Total, previously one of the biggest European buyers ofIranian oil, has said it had no choice but to halt imports and abandonIranian projects to safeguard its operations in the United States.
On Monday, Iranian Oil Minister Bijan Zanganeh said Total had officiallyleft Iran’s South Pars gas project.
Total later confirmed it had notified the Iranian authorities of itswithdrawal from South Pars after it failed to obtain a waiver from U.S.sanctions.
Iranian officials had earlier suggested China’s state-owned CNPC could takeover Total’s stake and Zanganeh said the process to replace the Frenchcompany was under way. – Agencies