Commentary
Climate mobility interventions can vary, but they all present opportunities to unlock transformative results that mitigate costs associated with inaction.
Alejandro Martin Rodriguez
{
"authors": [
"Jarrett Blanc"
],
"type": "legacyinthemedia",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [
"Iranian Proliferation"
],
"englishNewsletterAll": "americanStatecraft",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "ASP",
"programs": [
"American Statecraft"
],
"projects": [],
"regions": [
"North America",
"United States",
"Middle East",
"Iran",
"East Asia",
"China"
],
"topics": [
"Economy",
"Trade",
"Security",
"Foreign Policy",
"Nuclear Policy"
]
}
Source: Getty
In The Media
With U.S. Sanctions Looming, China Loosens Trade Ties With Iran
Early next month, the U.S. will re-impose sanctions on Iran that had been lifted under the Iran nuclear deal. China’s largest oil refiners may also stop importing Iranian oil in November, which will effect Iran’s economy.
By Jarrett Blanc
Published on Oct 29, 2018
Source: Axios
On Nov. 4, the U.S. will re-impose sanctions on Iran that had been lifted under the Iran nuclear deal. In response, the Bank of Kunlun, which handles China’s financial transactions with Iran, informed customers that on Nov. 1 it will stop processing them. China’s largest oil refiners, Sinopec and China National Petroleum Corporation (CNPC), may also stop importing Iranian oil in November.
Why it matters: China is Iran’s largest oil importer and most important trading partner. Because China is better insulated from U.S. sanctions than other major importers, Iran could avoid the worst economic effects of U.S. sanctions if China continues buying its oil. But if China cuts back, Iran will likely pull out of the nuclear deal, leaving it free to resume an unrestricted nuclear program.
The background: Nevertheless, Chinese government officials have been deeply critical of President Trump’s nuclear deal withdrawal. At the UN Security Council's September meeting, Foreign Minister Wang stressed economic sovereignty and defended “the legitimate right of all countries to normal economic relations and trade with Iran.”
There are three ways to think about China’s latest moves:
- A bargaining strategy. China is seeking discounts and other favorable commercial terms for continued trade with Iran, so leaking that its oil refiners are rethinking their positions gives China leverage. Since Trump is sensitive to oil prices, China may also be trying to soften the U.S. position by surprising the market and pushing prices up.
- A way to restructure trade with Iran. China may simply be further insulating its biggest firms from Iran-related sanctions by removing them from this trading relationship, leaving smaller Chinese refiners and banks to step into the gaps left by Kunlun, Sinopac and CNPC. This would put some effective limits on Iranian oil sales and other trade without totally shutting it down.
- A diplomatic concession. If China is preparing to comply with re-imposed U.S. sanctions, it might be as a sweetener to secure a Trump–Xi meeting at the November G20 to make progress on the trade war, which is vastly more important to both countries than Iran sanctions.
The bottom line: In any case, the Trump administration has succeeded in creating the impression that China bowed to U.S. pressure, something China was careful to avoid when it substantially reduced Iranian oil purchases under President Obama. By acting before Trump’s November deadline and leaking waiver requests, China has made, in principle, an important concession.
About the Author
Jarrett Blanc
Former Senior Fellow, Geoeconomics and Strategy Program
Jarrett Blanc was a senior fellow in the Geoeconomics and Strategy Program at the Carnegie Endowment for International Peace.
EconomyTradeSecurityForeign PolicyNuclear PolicyNorth AmericaUnited StatesMiddle EastIranEast AsiaChina
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Endowment for International Peace
- One Year After the Great Aid Recession, Investments in Climate Mobility Offer Cost-Effective Returns
- The Myriad Problems With the Iran CeasefireCommentary
Four Middle East experts analyze the region’s reactions and next steps.
- +1
Amr Hamzawy, Andrew Leber, Eric Lob, …
- The Iran War’s Global ReachCollection
As the war between the United States, Israel, and Iran continues, Carnegie scholars contribute cutting-edge analysis on the events of the war and their wide-reaching implications. From the impact on Iran and its immediate neighbors to the responses from Gulf states to fuel and fertilizer shortages caused by the effective shutdown of the Strait of Hormuz, the war is reshaping Middle East alliances and creating shockwaves around the world. Carnegie experts analyze it all.
- Amid Iran War, Gulf Countries Slow the Pace of ReformsArticle
The return of war as the organizing factor in Middle Eastern politics has predictable consequences: governments are prioritizing regime stability and becoming averse to political and social reform.
Sarah Yerkes, Amr Hamzawy
- Power, Pathways, and Policy: Grounding Central Asia’s Digital AmbitionsCommentary
Central Asia’s digital ambitions are achievable, but only if policy is aligned with the region’s physical constraints.
Aruzhan Meirkhanova
