US lifts Iran sanctions on one unit of Chinese shipping giant Cosco
- Treasury partially reverses punishment to company for transporting Iranian oil after China raised issue in trade talks with Washington
- US had blacklisted two Cosco subsidiaries in September, sending worldwide freight costs to record highs and disrupting global shipping market
The United States on Friday lifted sanctions on one of two units of the giant Chinese tanker company Cosco, the Treasury said, partially reversing its punishment to the company for transporting Iranian oil after China raised the issue in trade talks with Washington.
US President Donald Trump’s administration on September 25 blacklisted two units of Cosco, named after the northeastern Chinese port of Dalian. The move sent worldwide freight costs to record highs and disrupted the global shipping market.
The US Treasury Department said on Friday it deleted from its sanctions list Cosco Shipping Tanker (Dalian) Co, but continues to blacklist the second unit – Cosco Shipping Tanker (Dalian) Seaman & Ship Management Co.
A US official said lifting sanctions on only one of the Cosco subsidiaries would allow the Trump administration to retain leverage on China and push Cosco to stop taking Iranian oil.
A top Chinese official had raised the Cosco issue in the US trade talks, said one source who advises Cosco and is familiar with the Chinese government’s position. The trade talks earlier this month resulted in a phase one deal, defusing an 18-month trade war that hurt global growth.
The Dalian Cosco units only have about 40 tankers, but Washington’s move last year led to confusion about whether sanctions applied to the parent company’s fleet of more than 1,000 ships.
The Treasury Department had twice issued waivers to allow companies to wind down dealings with the Cosco units, the latest of which was set to expire on February 4, but shipping markets remained unnerved.
China is the world’s only major importer of Iranian oil despite sanctions Trump unilaterally reimposed on Tehran’s petroleum exports in 2018 after withdrawing the United States from the 2015 Iran nuclear deal between Tehran and six world powers.
Trump hopes the sanctions will also limit Tehran’s ballistic missile programme and influence across the Middle East. Tehran says its nuclear programme is for peaceful purposes.
Chinese customs data showed on Friday that China took in 14.77 million tonnes, or 295,400 barrels per day, of Iranian oil in 2019, about half the imports of 2018.
Most of the oil likely went into Chinese government stockpiles, according to Refinitiv Research.
