China Boosts Gas Sales to Iran, Irks U.S.

[Prometheus Bound]

April 16, 2010 - 4:51 pm
STRATFOR
Reports emerging over the last two days suggest China is increasing its gasoline exports to Iran. The state-owned China National Petroleum Corp.’s trading unit, ChinaOil, shipped two cargoes totaling 600,000 barrels of gasoline direct to Iran for $55 million, according to Reuters. Meanwhile, the trading unit of the China Petroleum & Chemical Corp. (Sinopec), Unipec, reportedly agreed to sell 250,000 barrels to Iran. The barrels reportedly would have been loaded for shipment April 15 through a third party in Singapore.

Though the exports would seem to thwart U.S. efforts to isolate Iran, Beijing is wary that defying Washington on Iran could provoke retaliation it is unable to handle.

....... The U.S. Treasury Department has pressured firms to cut back on their trade with Iran — especially gasoline exports, as Iran imports about 40 percent of its gasoline — or risk damaging their prospects for U.S. business.

Washington has met with some successes in its sanctions push of late. Malaysia’s Petronas announced April 15 that it stopped selling gasoline to Iran in mid-March. ....

.....Another company that has joined the U.S. sanctions drive is Russian firm Lukoil, which announced in April that it would consider stopping gasoline shipments to Iran. Lukoil joins Shell, Glencore, Vitol, Trafigura, Daimler, BP and Reliance....

....China has resisted participating in sanctions so it can expand its gasoline exports and to keep oil supplies coming from Iran, which accounts for roughly 11 percent of Chinese oil imports. Moreover, Beijing does not wish to jeopardize its investments in the Iranian energy sector.

....None of this suggests China has decided it will trigger a rupture in relations with the U.S. over Iran. At the same time it is selling Iran more gasoline, China is weaning itself off Iranian oil imports. These have dropped by 40 percent in January and February over 2009. China is thus trying to limit its exposure to Iran while increasing its leverage over Iran, in case it should find it necessary to participate in sanctions to pacify the United States.

....While Beijing is not likely to oppose Washington directly in the end, it might be hoping that its increased leverage over Iran via expanded gasoline exports will give it a better bargaining position vis-à-vis Washington in the coming months — particularly in the run-up to the U.S.-China Strategic and Economic Dialogue in late May......

More from this informative blog: http://blogs.forbes.com/energysource/2010/04/16/china-boosting-gas-sales-to-iran/

[Demeter]

1. See If China or Iran Gives a Care--Or Any Other Nation on Earth

Big Oil has just lost the battle for the world's resources. And we will be much better for it when the President doesn't feel the need to pimp out our military for private corporate gains.

[madrchsod]

2. iran sells natural gas to china....

the alberta oil sand is closer...