The US has slapped sanctions on a major Chinese oil trader for selling refined oil products to Iran, just days after US Treasury secretary Tim Geithner travelled to Beijing to press for Chinese support on Iran sanctions.
The US State Department announced late Thursday night that penalties would be imposed on China's Zhuhai Zhenrong. While the measures are unlikely to have a big immediate impact on this company, they send a strong warning signal to energy companies working in Iran at a time when the US has been canvassing Asian countries for more support in isolating Tehran.
The US State Department said Zhuhai Zhenrong is Iran's largest supplier of refined oil products, brokering sales of gasoline worth more than $500m between July 2010 and January 2011. The US State Department called the sanctions an "important" step in convincing Iran to change its behavior, and highlighted the "potential connection between Iran's revenues derived from its energy sector and the funding of its proliferation [of] sensitive nuclear activities. Under the sanctions imposed today, this company is barred from receiving US export licenses, US Export Import Bank financing, and loans over $10m from US financial institutions," the US State Department said.
A spokesperson for Zhuhai Zhenrong said the company had not sold gasoline to Iran. "We've never exported a barrel, not even a wee bit of refined fuel to Iran," said Zheng Mei, director of the public affairs department. Zhuhai Zhenrong is a state-owned oil trader based in Southern China. The company has a special mandate from the State Council to do crude trades that offset military trade debt with Middle Eastern countries, according to their website.
Ms Zheng, the spokesperson for Zhenrong, said the company would continue buying Iranian crude. "Zhuhai Zhenrong's trade with Iran is carried out under the two governments. The trade accords with international law and Chinese laws and regulations," she said. "What we've signed with Iran are long-term contracts and we import around 12m tonnes of crude from Iran each year," Ms Zheng said. "We've never exported gasoline to Iran. This is out of thin air! "The sanctions are likely to have little immediate impact on Zhenrong because the company does very little, if any, business in the US.
Reprinted with permission of Joffe and Joffe@