U.S. Penalizes Chinese Companies for Aiding Iran’s Oil Exports

WASHINGTON – Shifting to a tougher stance on Tehran amid signs that efforts to restore the 2015 Iran nuclear deal have failed, the Biden administration announced Thursday that it would impose sanctions on two Chinese companies that transport and store Iranian oil.

In a statement, the State Department said the United States was targeting Zhonggu Storage and Transportation Co. Ltd., which it said operates a commercial crude oil storage facility for Iranian oil, and WS Shipping Co. Ltd., which it said manages a vessel that has transported Iranian oil products.

The Treasury Department also said that eight entities based in Hong Kong, Iran, India and the United Arab Emirates had been designated as sanctions violators.

The actions come as Biden administration officials worry that more than 18 months of negotiations to contain Iran’s nuclear program may have reached an impasse and suggest they have begun seeking new ways to influence the leadership. country hardliner.

Sanctions against Chinese companies could also herald a tense confrontation with Beijing over its substantial purchases of Iranian oil, which have provided Iran’s government with a much-needed windfall, much to the frustration of the Biden administration.

President Donald J. Trump withdrew from a 2015 deal struck by the Obama administration and imposed new sanctions on Iran, prompting Tehran to significantly accelerate its nuclear program. US officials estimate that Iran could be within a month of having enough highly enriched uranium to produce a nuclear weapon, which could take a year or more to build.

This month, the United States and Iran appeared poised to restore the nuclear deal after the European Union submitted a “final text” for their joint deal. Biden officials say Iranian negotiators raised last-minute hurdles, including a demand that the International Atomic Energy Agency shut down an investigation into past undeclared Iranian nuclear activity.

During a visit to the UN meeting, Iranian President Ebrahim Raisi struck a bellicose tone and demanded more US concessions.

As Iran struggles to punish US sanctions imposed by Trump after it unilaterally abandoned the nuclear deal in 2018, China has helped Tehran stay solvent by buying large amounts of oil, its main export. Reuters reported in March that China now imports more oil from Iran than before Trump imposed new sanctions on Tehran, citing data from three tanker tracking companies that indicated China was importing around 700,000 barrels a day.

“China is primarily responsible for keeping the Iranian regime in business through oil purchases that have totaled $38 billion since President Joe Biden took office,” said the nonprofit group United Against a Nuclear Iran. in a report In the past week.

“Thus, China has proven to be Tehran’s savior by continuing to import millions of barrels of oil every day,” the group said, calling for tougher US action against Chinese entities.

A State Department spokesman said Wednesday that some public estimates of Iranian oil trade with China “have been inflated.”

Existing US sanctions allow sanctions against foreign governments whose companies import oil from Iran, but the Biden administration has refrained from taking that step against China.

Instead, the administration has tried for months to persuade Beijing to prevent Chinese companies from facilitating the export of Iranian oil, but to no avail. Thursday’s action suggests that the Biden administration may be losing patience with China and will increasingly take unilateral action.

The State Department said in a statement that as Iran pursues its nuclear program in violation of the limits of the 2015 deal, “we will continue to accelerate our enforcement of sanctions on Iran’s oil and petrochemical sales under authorities that would be removed” under a restored nuclear deal. .

“These enforcement actions will continue on a regular basis, with the aim of severely restricting Iran’s oil and petrochemical exports,” the statement said. “Anyone involved in facilitating these illegal sales and transactions must immediately cease and desist if he wishes to avoid US sanctions.”

The United States first imposed sanctions on a Chinese company for violating restrictions on buying Iranian oil in July 2019, when Mike Pompeo, then Trump’s secretary of state, announced sanctions against a state-owned oil trading company, Zhuhai Zhenrong. , and its CEO, Li Youmin.

After Washington imposed expansive sanctions on Iran in 2018, the Trump administration granted waivers to eight governments, including China’s, to continue importing limited amounts of oil. But those exemptions expired in May 2019.

Zhuhai Zhenrong and Sinopec, another state-owned company, were the largest importers of Iranian oil in China.

An August 2019 New York Times investigation found that China and other countries were receiving oil shipments from a larger number of Iranian tankers than previously known. Even after waivers expired that year, 12 Iranian tankers loaded and delivered oil in Asia and the Mediterranean, and six of them unloaded at Chinese ports.

Last month, the State and Treasury Departments announced sanctions against six companies, four of them based in Hong Kong, for helping sell tens of millions of dollars worth of Iranian oil and petrochemical products.

edward wong contributed report.