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China energy security
EconomyGlobal Economy

How China could benefit as US-Iran talks raise hopes of oil sanctions relief

Beijing’s support is seen as critical to peace negotiations – and analysts believe this could push Washington to relax sanctions on Chinese oil buyers

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China’s imports of Iranian oil have fallen sharply in recent months, according to the US think tank Middle East Forum, citing data from commodity intelligence firm Kpler. Photo: Reuters
Carol Yangin Beijing

A major diplomatic breakthrough between Washington and Tehran could signal sanctions relief for Iran, a development analysts say bodes well for China, the primary buyer of Iranian oil.

Negotiations have advanced on a proposed 60-day ceasefire extension, the reopening of the Strait of Hormuz and the US side issuing temporary sanctions waivers that would allow Iran to sell oil freely, Axios reported on Saturday, citing a US official. Any such relief would only be implemented under a final agreement, the report added.
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Washington is likely to loosen its grip on China’s Iranian oil imports, “given that the US-Iran peace talks cannot succeed without Beijing’s support,” said Wang Yiwei, director of the Institute of International Affairs at Renmin University.

Without Beijing acting as a diplomatic backstop, a deal requiring Tehran to relinquish its nuclear leverage and reopen the strait would leave it with virtually no chips at the negotiating table, Wang said.

US President Donald Trump noted that he had discussed the issue with President Xi Jinping during their mid-May meeting in Beijing and that he was currently weighing whether to ease sanctions on Chinese oil companies buying Iranian crude.

“I’m going to make a decision over the next few days,” Trump told reporters aboard Air Force One during his return flight to the US.

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If the US were to remove the restrictions on Iran, China would be expected to resume imports from the country, said Han Zhengji, a crude oil analyst at the commodity consultancy JLC Network Technology.

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