China tells state-owned oil firms to stop buying from Iran ahead of new US sanctions
- China National Petroleum and Sinopec told to halt purchases before new measures take effect on November 4
- Companies that continue to buy Iranian oil risk being excluded from US financial system
China’s government has told at least two of its state oil companies to avoid purchasing Iranian oil as the US prepares to impose sanctions on the Islamic Republic, according to people with knowledge of the matter.
The freeze on imports by China National Petroleum Corporation and Sinopec is temporary and purchases may resume depending on the outcome of negotiations with the US, said the people, who asked not to be identified because the information is confidential.
Companies that continue buying Iranian crude after sanctions take effect on November 4 face the risk of being cut off from the American financial system.
The decision precedes an upcoming meeting between President Xi Jinping and his US counterpart Donald Trump at the Group of 20 summit next month and coincides with flaring trade tensions between the countries.
The sales freeze means Iran will lose out on sales to its top oil customer after a halt by other major buyers like Japan and South Korea.
Spokesmen for both CNPC and Sinopec declined to comment. Reuters reported earlier that the companies had made no bookings for November-loading Iranian oil.