China is buying more Iranian and Venezuelan oil, in a test for Biden

That trend is confirmed by other ship trackers, some of which see sales at 1 million barrels per day.

“If it sells 1 million barrels a day at current prices, Iran has no reason to negotiate,” said Sara Vakhshouri, president of Washington-based SVB Energy International and an expert in Iran’s oil industry.

President Biden’s administration has been trying to enter talks with Iran to return to a 2015 nuclear deal that was ended by its predecessor, former President Donald Trump. But Tehran has so far rejected the overtures.

According to London financial data provider Refinitiv, Chinese oil purchases are also on the rise in Venezuela, where the US has tried to use sanctions to pressure the Maduro regime to hold credible democratic elections.

Increasing oil shipments to China, Iranian and Venezuelan officials said, followed Mr. Biden’s offer to relieve Iran in exchange for the country’s compliance with an international nuclear deal and to Venezuela if it organized free elections. Mr. Trump pursued a policy of escalating sanctioning pressure against both countries.

China is also increasingly ignoring international sanctions against North Korea and no longer trying to hide some of its smuggling activities as it tries to help Pyongyang, US officials recently said.

Coupled with rising oil prices, the developments have eased pressure on Tehran and Caracas to negotiate with Washington, these people said.

“The informal Chinese purchases have reduced the need to negotiate oil sanctions,” said an Iranian-focused US official.

The State Department, which was asked about the effects of Chinese imports of Iranian crude oil on efforts to re-employ Tehran, did not respond to a request for comment. Ned Price, the State Department spokesman, has rejected the idea that the Biden government would ease sanctions without Tehran’s measures to curb violations of the nuclear deal, known as the Joint Comprehensive Plan of Action, or JCPOA.

“If the Iranians feel that in the absence of any movement on their part to resume full compliance with the JCPOA, we will offer favors or unilateral gestures, then that is a false impression,” Price told reporters earlier this week.

Since November, Iranian oil traders say they have been approached for new sales by Asian buyers looking to take advantage of discounted prices as buyers believe sanctioning pressures under the Biden administration will ease.

Iranian officials and traders have become increasingly adept at evading sanctions, conducting secret remittances in the Persian Gulf and in South Asia to hide the origin of their cargo, and finding new ways to get paid by using from non-banking platforms such as cryptocurrencies.

On Monday, Iranian First Vice President Eshaq Jahangiri said Iran’s oil exports have increased in recent months, although he has not provided details.

“There were certain problems with money transfers. So we had to come up with certain plans, methods to bring in the oil export earnings, and we recently had a breakthrough, ”Mr Jahangiri told state news agency IRNA.

Kpler analyst Homayoun Falakshahi said ship tracking showed fastest growing buyer was state-run China Petroleum & Chemical Corp.

or Sinopec, the country’s largest refinery. According to former Iranian oil officials and an adviser to the company, in the past two years after cutting staff and spending, Sinopec has been posting new job openings online and talking to the government about doubling production in the country.

Officials from Sinopec and the Chinese Embassy in Washington have not responded to requests for comment. Chinese officials have long criticized US policies in Iran and Venezuela, as well as their financial diplomacy, as one-sided and coercive.

Washington is still hoping to entice the Islamic Republic with the more substantial relief that would come with the release of billions of dollars in frozen oil money and a return to official crude oil sales. In return, the US wants Iran to stick to the nuclear deal despite repeated breaches and to tighten control of Tehran’s ballistic program and other efforts not covered by the original nuclear deal.

Meanwhile, Iran has helped Venezuela by supplying petroleum products, selling diesel and other critical energy needs in exchange for Venezuelan oil and gold. That oil is then sold on world markets, generating income for Iran and bolstering Mr Maduro politically.

To the US-China relationship, already strained by a series of security and economic disputes, Beijing’s crude oil trade with two of Washington’s best enemies adds yet another major irritation.

“This is a complex relationship and perhaps the most consistent relationship for both our countries, and it has hostile aspects, it has competitive aspects and it has cooperation aspects,” said Secretary of State Antony Blinken earlier this week.

US officials have reminded China that companies that help import oil from Iran risk sanctions and say Beijing could be punished for its Venezuelan trade. The State Department declined to comment on its communications with China.

“The Maduro regime has adapted to oil sanctions and found a way to supply oil to China and Russia, and Iran has helped them,” a senior government official said. “So we’re going to use our sanction tools to make sure we eliminate those options,” for Maduro’s government, the official said.

However, others say the government will also be careful to balance such policies with US economic interests. “In some cases we have not imposed sanctions [China] because of the impact on our economy. If we strike hard, they can retaliate, ”said another US official.

Biden government officials are meeting with Chinese counterparts in Alaska for the first time this week.

Write to Benoit Faucon at [email protected] and Ian Talley at [email protected]