China's President Xi Jinping meeting with Iran's Supreme Leader Ali Khamenei in 2016.

Iran News Agency Praises China For Help Dodging US Sanctions

10/5/2021

Fars news agency, an affiliate of Iran’s Revolutionary Guards, has run a series of articles exploring China’s help in combating United States oil sanctions.

Under the rubric ‘Eastern Puzzle,’ Fars has argued that US sanctions are part of a wider scheme to restrict China's access to crude from the Persian Gulf − and that China in response is ready to help Iran to improve its own energy security.

"Given the successful experience of Iran's cooperation with China during the ninth and tenth administrations [of President Mahmoud Ahmadinejad, 2005-13] in circumventing US sanctions, it appears that after eight years of coldness in the relations between the two countries, signing strategic and key energy, transit and investment contracts and agreements will soon be on the agenda again," Fars said in one article, published September 29.

The "eight years of coldness in relations" according to Fars marked the two terms of Hassan Rouhani's presidency when hardliners in Iran campaigned against him for being pro-West, while former US president Donald Trump walked away from the 2015 nuclear deal and imposed heavy sanctions on Iran.

President Ebrahim Raisi has stressed that his policy is to deepen ties with China and Russia. "The 13th administration has from first day put two things at the top of its agenda, one is giving priority to reinforcing relations with eastern countries, China and Russia in particular, and the second is adopting a strong position regarding the nuclear case," Fars wrote Monday.

Withstanding pressure

Supreme Leader Ali Khamenei has also for a few years taken up the catchphrase “Looking East.” In a speech February 13, 2021, he said that in resisting "US unilateralism," Iran should look to the east to achieve a "resistance economy" that could withstand US economic pressures.

Fars supported its argument that US sanctions were aimed in part to "harness China" with economist Majid Shakeri saying in one article in the series that "those who follow the issue…closely have admitted that since 2019 the US sanctions have been targeting not Iran's oil exports, but China's oil imports from Iran."

While imports from Iran are a small part of Bejing’s 9.7 million barrels a day (bpd) of crude imports − even before US ‘maximum pressure’ sanctions China imported only around 1 million bpd from Iran − Beijing takes the view that the trade is perfectly legal and recently condemned the US’s “long arm jurisdiction.”

US Wants China To Cut Back

The US has reportedly of late asked China to cut back on Iranian crude imports, which continued after 2018 while other buyers, in both Asia and Europe, desisted in fear of likely US measures against any entity buying Iranian crude. Chinese imports are disguised to avoid US scrutiny, but commodity analytics firm Kpler estimated they averaged 553,000 bpd in 2021 up to the end of August.

Fars noted that payment methods involved bartering oil with commodities or investment, international money exchangers, using small banks in China that the US cannot easily monitor, and payment in the Chinese yuan.

Fars suggested that with the help of Chinese customs Iran's oil exports now exceeded 1 million bpd. "If the Iranian government adopts a correct strategy in its dealings with China, the Chinese can offer considerable assistance to Iran in circumventing sanctions and selling its oil," the agency noted on September 29.

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